The nondomiciliary residents, if that's what they are, are purchasing goods
and servicers within the borders of the UK with something. Either they
have onshore income, are depleting onshore assets, are incurring onshore
debts, or are importing resources. Even if they are only using onshore
resources to support themselves in Britain, the existence of their offshore
income is what permits them to make disbursements within Britain. In this
way, their offshore income contributes indirectly to UK income
distribution. But it clearly would not contribute to administrative
byproduct data from the taxation authorities and is unlikely to be
enumerated in a survey, depending on question wording and respondent
interpretation. So I wouldn't expect them to contribute to UK income
distribution STATISTICS, which is how I read Mike's remark.
Harry
Mike Brewer
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.UK> Subject
Re: HOW MANY UK RESIDENTS WITH NON-DOMICILE TAX STATUS?
Protective Mark
03/10/2007 09:45 PM
Please respond to
Mike Brewer
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Ray,
People who are non-domiciled do fill in tax returns and pay tax on
income earned in the UK.
They do not declare (nor pay tax on) income earned abroad. Such income
is free of UK tax provided it does not come into the UK.
I was trying to say that income which is earned abroad and stays abroad
but which belongs to someone in the UK is arguably irrelevant for the
distribution of income in the UK. In other words, say I have a Swiss
bank account with money that never comes to the UK, but which I spend
when I take my annual skiing holiday in Switzerland. Surely that is
irrelevant for the distribution of income in the UK?
In your example below, you suppose that a non-domiciled person uses
their offshore income to buy a house in the UK. Of course that affects
the UK economy. But if they did that, then they would be bringing
offhsore income into the UK, and so they would be paying UK tax on it,
and it would appear in our tax statistics.
Mike
R.Thomas wrote:
> And I'm amazed at the statement "In any case, the foreign income of
> these people arguably has no impact upon the income distribution in the
> UK."
>
> Tell that to any estate agent in London!!
>
> Of course wealth trickles down. But in this area the wealth trickles
> down to exotic holiday locations. At home high prices trickle down.
>
--
Mike Brewer
Programme Director, Direct Tax and Welfare
Institute for Fiscal Studies, www.ifs.org.uk, 020 72914800
Registered Office: 7 Ridgmount Street, London WC1E 7AE
Registered in London, Company number 954616, limited by guarantee
IFS is a registered charity, number 258815
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