The technical change is significant: HMRC has decided that it will not now retrospectively deem that assets used as security for the UK loans of non-doms are assets that have for tax purposes been remitted to the UK, with tax potentially therefore being due on them.To put it another way: HMRC have decided a loophole for the rich that it had been announced would be reversed can continue.
Three thoughts follow.
First, Jolyon Maugham and I worked hard with Labour before the election to suggest the non-dom rule had to end, and that policy initiative provided it with the most successful day of its campaign. I remain convinced it is the right thing to do. There is no justice in a tax system that discriminates between people on the basis of the accident of a person’s place of birth. There should be no more loopholes because there should be no non-dom rule since it offends all the most basic tenants of social justice.
He’s been telling us for years that tax is due where the economic activity takes place. So why should UK tax be due on economic activity that does not take place in the UK?