CGT and Non-Doms Decision Prompts More Protests; CAPITAL GAINS TAX
Byline: By Duncan Tift Business Staff
The Chancellor's attempts to appease the business community by making a series of changes to capital gains tax and the taxation of non-doms failed to find favour yesterday.
Proposals to hike CGT and tax non-doms were met with outcry when they were announced in last year's Pre-Budget Report.
A widespread consultation resulted in changes being made to the proposals but not enough to satisfy everyone, and those hoping for a last-minute change of heart were left disappointed yesterday.
Mr Darling introduced a series of changes to the non-doms legislation meaning income and gains in offshore trusts would only be taxed when they were remitted to the UK, even if these came from UK assets.
In addition, the new pounds 30,000 charge will also be creditable against foreign tax, while art works brought into the UK for public display or repair will not be charged. When art works owned by offshore trusts are sold in the UK tax will only be paid when the trust remits the gain to the UK.
People with remitted offshore income and gains of under pounds 2,000 are exempt from the pounds 30,000 charge, as are children.
In introducing the new measures Mr Darling confirmed there would be no further changes to the legislation during the current Parliament or the next.
He said: "We welcome the contribution made by people born outside the UK who choose to come and work here.
"They are an important and central contributor to our economy's growth and prosperity.
They pay taxes on their earnings here and also pay tax on money they bring into the country from abroad.
"But for those non-domiciled individuals or families who have chosen to make Britain their home, I believe that it is right and fair that they should, after seven years, pay a reasonable charge to maintain the right to be taxed differently from other UK residents."
However, there was widespread condemnation of the measures.
Christine Oates, head of tax at Ernst & Young in Birmingham, said the announcement was "a grave disappointment whose impact will be felt for many years to come". …