If the Swiss are chucking out non-doms, should we?
Richard Ehrman: No other major western country gives the footloose super-rich such an unquestioning welcome
How has Britain become the tax haven of choice for the world's billionaires? The question is prompted by the publication at the weekend of the annual Sunday Times Rich List.
When the List was launched back in 1989 it was dominated by British names and money. Today, the fortunes of only three of the top twenty, the Duke of Westminster, Sir Philip Green and Sir Richard Branson, are primarily British. Three more seem to have a significant part of their assets here.
The other fourteen, worth between them nearly £100 billion, appear to be so-called non-doms; foreigners who base themselves in this country but most of whose businesses or fortunes remain abroad.
As a non-dom, an overseas billionaire resident here can pay as little as a flat rate £30,000 a year in British tax, and even that only kicks in once he has been here for seven years. It is a very good deal, and this is a nice place to live if you are rich.
Those from less stable countries particularly appreciate our political and cultural tolerance, the absence of organised crime, and (more surprisingly) our temperate weather. But while the benefits for non-doms are clear enough, the advantages of hosting them are less so.
They have helped make London one of the most vibrant cities in the world. But they also have made London property so expensive that few British people can afford to live in the centre anymore. There can be problems if they bring their politics and feuds with them.
And while top end estate agents, architects, lawyers and bankers do well out of them, further down the food chain most of the builders and domestic workers they employ are themselves immigrants.
No other major western country offers the footloose super-rich the unquestioning welcome we do and certainly not at so low a price. Even Switzerland, long famous for its tax exiles, is going off them.
Two years ago Zurich voted to scrap special tax deals for wealthy foreigners. Since then nearly half have left, but the tax lost is reckoned to be less than the extra paid by those who remain. Zurich is probably even more dependent on international finance than London. Yet Swiss millionaires, fed up with having to pay more tax than foreigners, were among the keenest supporters of the move.
In the coming months six other cantons are due to vote on whether to follow Zurich's lead, and there may be a federal referendum on the subject. When Switzerland decides to cut the number of tax exiles, you have to wonder why we are so keen on having more of them here. ·
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