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Non-Dom Status - "Should they be MPs?"

May 8, 2022 8:28 PM
Non-Dom Status Part 1

"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 "The UK's 'non-doms': Who are they,
what do they do, and where do they live?"

Your 'domicile' is where you say is your permanent home but if that's UK, you can't be 'non-dom'
Everyone is considered to start with a 'domicile of origin' - your father's domicile when you were born - unless you are illegitimate, in which case it's your mother's domicile 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.

Sajid David

Sajid Javid

* 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.

To what extent should non-doms participate in UK politics at all, especially if in the position of a legislator, given that being a non-dom involves a declaration that a person's domicile or permanent home is in another country? This implies little commitment to the UK and means that a non-dom could be involved in law or regulation-making that would not apply to them and for which, they would within 15 years as a maximum, no longer be accountible.