Farage is right to try to woo back non-doms like me, but it may be too late
Nigel Farage is right to try to address the non-dom exodus, but it may be too late as many of us have already made the difficult decision to leave, says Dr Ann Kaplan Mulholland
The recent non-dom exodus from the UK has thrown the nation’s economy into a tailspin. Originally established in 1799 to attract wealthy investors, the non-domicile tax regime was like a red carpet rolled out to invite affluent foreigners to make England their home. For centuries, the wealthy flocked to the UK, bringing their capital, businesses and a certain je ne sais quoi that made the country not just picturesque, but also a thriving powerhouse for business.
Fast forward to today, and we find the government has decided to play tax chicken with some of its most valuable contributors. First, let’s talk about the decision that sparked this exodus. The new deal? Non-doms would now have to pay taxes on their worldwide income, including foreign assets already taxed in their home countries. Oh, and they also get to enjoy a delightful 40 per cent inheritance tax on those assets, because why tax once when you can tax more? With astonishing naivety, the government assumed that wealthy individuals would simply shrug, thank the Chancellor for her generosity, and keep on contributing to the UK economy.
Rolling out the red carpet
Spoiler alert: they didn’t. Instead, countries like Italy, Dubai, Monaco and Switzerland are offering non-doms the choice of where to invest their billions, complete with a side of sunshine and the promise of no double taxation.
It’s like a buffet of tax incentives, and who wouldn’t want to grab a plate? As a non-dom myself who has chosen to relocate to Italy, I can attest that leaving the UK was not just a logistical exercise, it was an emotional rollercoaster. While some might relish watching the wealthy exit stage left, it’s essential to recognise the financial contributions we’ve made to the UK economy. It’s a bit like kicking your best player off the football team and expecting to win the championship.
Rachel Reeves, bless her heart, has been one of the loudest voices calling for taxing the rich. If balancing the books was her goal, she might as well have thrown her calculator out the window. Now, the government is left scrambling to fill the growing deficit, likely resorting to raising taxes on those who can barely afford to keep the lights on.
But it may be too late…
So, what’s the solution? Nigel Farage’s party recently suggested a ‘Britannia Card’, basically a fee of £250,000 for qualified non-doms which would then be handed to lower earners. While the idea of exempting non-doms from inheritance tax might seem tempting, it doesn’t address the bigger picture of worldwide asset taxation.
Why not consider a fee for non-doms to remain in the UK? An annual charge could provide a handsome revenue stream alongside the taxes non-doms already pay on their UK earnings – and could even pay for a tax cut for lower earners.
Nigel Farage is right to try to address the non-dom exodus, but it may be too late as many of us have already made the difficult decision to leave.
It’s time for the UK government to regain the trust of its wealthy contributors and recognise their importance in the economic ecosystem. By embracing innovative solutions rather than punitive measures, we can navigate these turbulent waters and ensure a prosperous future for all.
Dr Ann Kaplan Mulholland is a businesswoman, professor, MSc, MBA