Another report from Ritchie today.
First we propose that everyone who has a UK passport should be tax resident
in the UK, automatically, wherever they live in the world. That means they
would always have liability to pay tax in the UK on their worldwide income,
gains and wealth, just as all US citizens do in the USA.
How d\’ye like them apples? You are to be, wherever you live in the world, a helot to HM Treasury.
especially true of those who have long term ties to the UK and who have the
right to reside here permanently but who seek to avoid their obligation to pay
tax in exchange for that right.
Yup, just the right of residence in the UK means you should be paying tax in the UK. You could be born in The Bahamas, grow up, live, work, marry and die there, but if you\’ve the right of residence in the UK (say, through inheritance) then Ritchie says that you should be paying tax in the UK.
The fact that a person has the
right to reside in the UK and make use of all the facilities it has to offer –
whether they do so or not – is what establishes the obligation to pay tax.
That you don\’t use the NHS, education system, roads and the rest matter naught in Ritchie world. You\’ve got money and the State should have it!
is not after all a payment for services supplied: tax is the price we pay for
having the right to live, work and participate in a state, whether we avail
ourselves of that right, or not.
This provides a giggle though:
Firstly, and perhaps most importantly, this briefing suggests that the domicile
rule should be abolished with regard to taxation. This historic legal
anachronism, which is discriminatory in origin and practical outcome, should
have no place in a modern tax system. It is quite unacceptable that an accident
of birth should alter a person’s UK tax liability when all other matters are
Erm, isn\’t being born with the right to British nationality, residence, simply an accident of birth? Meaning that he\’s just contradicted everything he\’s suggesting above about the passport method of determination?
Finally, he talks about the money these changes will raise. Ah, but he\’s forgotten, he\’s forgotten that he\’s just abolished domicile. There\’s no certainty that there will in fact be any money raised by this at all.
Take me as an example. I\’m not resident in the UK. I am, however, almost certainly domiciled. I\’ve not yet bothered to take up my right to an Irish passport so almost certainly am, despite having been out of the country for what, 18 of the last 20 years?
So I\’ve no income tax arising in the UK….however, the UK, me being domiciled, will indeed take an interest in whatever might be in my will when I pop my clogs. Taking me into the income tax net (given his exemptions, especially for EU countries, where he\’s got no alternative than to exempt) but taking me out of the domicile net would be a money loser, not gainer.
This is the problem with getting the tax system redesigned by a retired small time (his practice was dealing with the affairs of luvvies and musicians) accountant.