“Non-Doms” are people who are classified as “not being ‘domiciled’ in the UK” for tax purposes.
The Centre on Competitive Advantage in the Global Economy (CAGE) is a research centre based in the Department of Economics at the University of Warwick. It conducts independent policy-driven research informed by history, culture and behaviour focussing on explaining comparative long-run economic growth performance.
CAGE Warwick and the LSE International Inequalities Institute have recently published a short study entitled “Reforming the Non-Dom Regime: Revenue Estimates”.
Your ‘domicile’ is where you say is your home is (or very soon will be), but if that’s UK, you can’t be ‘non-dom’. Everyone is considered to start with a ‘domicile of origin’ – usually the same as the domicile of your father at the time of your birth – unless you are illegitimate, in which case it’s your when you where born. You can choose to change to another domicile later.
If you are a wealthy person and are accepted as a non-dom for tax purposes this can bring very significant financial benefits.
Here are some highlights from their study.
* Non-Doms are globally connected, either by birth or from time spent living abroad.
Over 93% of those classified as Non-Doms in 2018 were born abroad.
An additional 4% have lived abroad for a substantial period.
* The share of people claiming non-dom status rises rapidly with income.
30% of individuals who earned £5 million or more claimed non-dom status in 2018, and a further 10% had claimed non-dom status at some point in the past – as Sajid Javid recently revealed he had done. However, only 0.3% among those earning less than £100,000 had ever claimed non-dom status.
* More than one in five top earning bankers is a non-dom.
Around 22% of bankers in the top 1% (income above £125,000) have claimed non-dom status at some point. Non-doms also make up a large proportion of other finance and ‘city’ jobs.
* Most non-doms come from Western Europe, India, and the USA.
There are also sizeable minorities from other English-speaking countries. Since 2001, there has been a rapid rise in the number of non-doms from India, China and the former Soviet states.
* Most non-doms reside in and around London.
Non-doms make up more than 10% of adults living in Kensington and the Cities of London and Westminster. Outside London, the largest non-doms presence is in the Home Counties, the university towns of Oxford and Cambridge, and in Aberdeen with its petrochemicals industry.
* Within London, non-doms tend to live in the most expensive districts.
Most non-doms live in the West End, the affluent areas along the upper sections of the Thames, and around the financial hubs in the City and Canary Wharf.
* Non-doms locate within distinctive national enclaves.
Western European non-doms dominate in Westminster, Kensington, and Chelsea. American non-doms are most prevalent in parts of North Central London. Non-doms from other English-speaking countries are clustered south of the River Thames around Richmond, whilst Indian non-doms prevail in more suburban areas such as Harrow, Hillingdon and Bromley.
Since the Constitutional Reform and Governance Act 2010 non-doms may not be members of the House of Lords. However they may be members of the House of Commons with the proviso that for tax years while they are MPs they are liable to Income Tax, Capital Gains Tax and Inheritance.
The question is does a person with non-dom status have a sufficient and enduring affiliation to the UK that justifies them being MPs? Why should someone who puts their tax affairs ahead of their domiciliary status be in a position to make legislation which may continue to affect the lives of those of us who are residents and citizens of the UK with no declared intention to move somewhere else, long after the non-dom MP has moved away and gone?