More than one in five top earning bankers has benefited from non-dom status, according to a new LSE and University of Warwick report. Non-doms also make up a sizeable share of top earners – those in the top 1%, earning over £125,000 – in other industries, with two out five top earners in the oil industry and one in four top earners in the car industry having claimed non-dom status at some point. One in six top earning sports and film stars living in the UK have claimed non-dom status, with an average income of £2 million each. These findings come from new research which gained unprecedented access to the tax records of the UK’s non-doms.

The study analysed the anonymised personal tax returns of everyone who claimed ‘non-dom’ status between 1997 and 2018. Non-doms are individuals who are resident in the UK, but who claim on their tax return that their permanent home (‘domicile’) is abroad. This entitles them to claim special tax treatment not available to ordinary taxpayers, even though they may spend most of their time in the UK and have lived here for several years. Unlike other UK residents, non-doms can avoid paying tax on their investments by locating them offshore. This regime dates back to colonial times.

The very rich are much more likely to make use of non-dom status than those on lower incomes. Four in ten individuals who earned £5 million or more in 2018 have claimed non-dom status at some point, compared with less than three in one thousand among those earning less than £100,000.

More than 93% of non-doms were born abroad, coming mainly from Western Europe, India and the US. Over the past two decades, the fastest growth has been from India and China. On moving to the UK, most non-doms live in London and the Home Counties. Within London, non-doms tend to live in the most expensive districts, with more than one in ten residents of Kensington, and the Cities of London and Westminster, having claimed non-dom status at some point.

Click for the full article

Leave a Reply

Your email address will not be published. Required fields are marked *