Sunday, April 06, 2008

Welcome Russian billionaires

And others fleeing the brutal Gordon Brown crackdown on UK residents who are claiming an overseas domicile and therefore only paying tax on income brought into the UK. Ireland will take you in --

Some long-established U.K. residents, such as Stone, say moving to Ireland may be an easy option. ``We would look at other tax havens where we are not going to be hassled or bankrupted,'' she said.

Ireland offers the non-dom everything England is taking away, said Jim Ryan, a personal tax partner at Ernst & Young Tax Services in Dublin and deputy president of the Irish Taxation Institute.

Non-doms in Ireland still enjoy the breaks that are disappearing in the U.K. The Irish government estimates that more than 7,000 people live in Ireland as non-doms.

It's true that the non-dom rules are unlikely to be controversial in Ireland given that a critical mass of the public has no problem with a much more pernicious loophole -- that which allows tax exiles like JP McManus to be based somewhere like Switzerland for tax purposes, but still have enormous influence on Irish politics through donations to Fianna Fail, which includes having tax rules written for their advantage. Such as the "Cinderella rule", meaning that as long as you're out of Ireland by midnight on a particular day, that day doesn't count as a day in Ireland for tax purposes (which would otherwise risk the claim of not being resident).

Anyway, with the Irish public finances in trouble, the little extra revenue that new non-doms would bring on the Irish-remitted income may be badly needed.

UPDATE 20 NOV 2008: The Cinderella rule is dead. But rules for non-doms seem to have been relaxed (section 37: non-doms can have UK-based capital gains which are taxed on a remittance basis i.e. only on the amount they bring into Ireland).

FINAL UPDATE 13 DEC 2009: Budget 2010 confuses the issue with a new domicile tax, albeit one that seems designed to have very few people pay it.

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