The downside of being rich, super rich or even ‘uber’ rich (if there is one) is that somewhere in the world your assets and investments are likely to attract the attention of tax authorities.
In the UK, as in many other countries, the global banking system is being fully utilised by rich individuals setting up, for example, offshore trusts to buy among other things assets in Britain while avoiding paying tax to Her Majesty’s Government.
The publicly sensitive issue of tax treatment – or lack thereof – of non-domiciled residents, or ‘Non-Doms’ as they are known in the UK, was seized upon by the Opposition Conservative Party last week.
The ‘Tories’ pledged to slap a £25,000 annual charge on those wanting to claim ‘Non-Dom’ status and using the revenue generated to abolish inheritance tax.
However the move is unlikely to unsettle many private bankers and other service providers to the top end of a market covering an estimated 150,000 individuals, with many of their clients seeing this as small change.
London is home to some 23 foreign billionaires, with the two most prominent being steel magnate Lakshmi Mittal and Chelsea Football Club owner, the Russian-tycoon Roman Abramovich.
Staying with football – there are some 300 foreign players in the English Premier League who operate as ‘Non-Doms’, with many registered in places like the Cayman Islands and Bermuda.
However in a country where the average middle class family forgoes 40% of its income in tax, there appears to be some growing resentment to people outside this sphere.
In fact the International Monetary Fund went so far as placing London in the same bracket as Bermuda in April, labelling it an “offshore financial centre” – in other words a tax haven.
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