Britain tightens tax rules on ‘non-dom’ wealth to raise 12.7 billion pounds

reuters_tickers

LONDON (Reuters) – British finance minister Rachel Reeves announced she would close exemptions that let wealthy, often foreign residents avoid tax on overseas income, helping to raise 12.7 billion pounds ($16.47 billion) over the next five years.

Britain’s ‘non-dom’ tax rules, which enable non-domiciled residents to pay little or no UK tax on money earned overseas, have long been contentious. The previous Conservative set out plans to toughen the rules in its last budget in March.

Reeves said the Labour government would go further by closing unspecified loopholes and introducing a new, residence based scheme.

“I have always said that if you make Britain your home, you should pay your tax here,” she told parliament as she announced her first annual budget.

The Labour government has spent months wooing the business elite since July’s landslide election victory but it is increasing taxes to meet its pledge to voters to spend more on public services.

Private banks and advisers to the super-rich have said some clients with non-dom status will quit the country if the government increases taxes on them.

($1 = 0.7711 pounds)