M622 – Non-Dom Status Abolition Motion 2020

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Andrew97
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M622– Non-Dom Status Abolition Motion 2020, TSR Labour Party



Non-Dom Status Abolition Motion 2020



This House notes that the tax rules are not consistent for those who are non domiciled, for example, those UK residents who earn foreign income may not have to pay tax on it, for example capital gains tax.1

This House believes that such a settlement is unjust since the rule is used by notable wealthy individuals (who have considerable income from abroad) to avoid paying their fare share of taxation, for example the former governor of the Bank of England, Mark Carney and Chelsea FC owner Roman Abramovich.2

Therefore, this House calls for the government to introduce legislation to reform the tax codes, so that those who are resident in the UK should be subject to the same taxes on income earned both in the UK and abroad.

Notes

This motion simply seeks to make those who enjoy the benefits of living in the UK to pay tax on all of their wealth. The current arrangement is not fair when low income UK residents have to pay taxes on all their income. This will also mean they will have to declare their foreign income and assets and thus limiting the avenues of tax avoidance. Furthermore those who are resident in the UK often create their foreign wealth through the benefits that this country provides them. For example Premier League football players who often build wealth based on their image of being players in an English League.


1 https://www.gov.uk/tax-foreign-incom...iled-residents
2 https://www.taxjustice.uk/tax-takes-9.html

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Jammy Duel
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So why should people have to pay tax twice?
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Miss Maddie
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No and the reasoning is misleading.

UK residents avoiding tax on foreign income doesn't mean they don't pay UK tax. They still pay UK tax on UK income. They might pay foreign taxes too. No one should be double taxed on income because they earn money from outside the UK.
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The Mogg
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An obvious no to double tax.
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Jammy Duel
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(Original post by Miss Maddie)
No and the reasoning is misleading.

UK residents avoiding tax on foreign income doesn't mean they don't pay UK tax. They still pay UK tax on UK income. They might pay foreign taxes too. No one should be double taxed on income because they earn money from outside the UK.
It appears they didn't even read their own source which explains the rules.
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El Salvador
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People don't necessarily pay taxes twice with this. They only do if they get paid in their overseas account and get taxed by the UK when they transfer the money to the UK. My income online from Hong Kong for example is not taxed by Hong Kong. Had I opted for a part of my salary in the past paid into my UK instead of Mexican account that still wouldn't have been taxed by the UK under this as long as I don't live in the UK. When I was living in the UK and receiving some income from Hong Kong, that was not taxed by anyone.

I don't know how many would be doubly taxed. Perhaps taxes beyond salary taxes would be, such as if one was renting out a house overseas, but I'm not sure.
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Jammy Duel
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(Original post by El Salvador)
People don't necessarily pay taxes twice with this. They only do if they get paid in their overseas account and get taxed by the UK when they transfer the money to the UK. My income online from Hong Kong for example is not taxed by Hong Kong. Had I opted for a part of my salary in the past paid into my UK instead of Mexican account that still wouldn't have been taxed by the UK under this as long as I don't live in the UK. When I was living in the UK and receiving some income from Hong Kong, that was not taxed by anyone.

I don't know how many would be doubly taxed. Perhaps taxes beyond salary taxes would be, such as if one was renting out a house overseas, but I'm not sure.
You might want to look into why there was not tax paid in each of those situations
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Moonbow
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(Original post by Andrew97)



Non-Dom Status Abolition Motion 2020


undefined
This House notes that the tax rules are not consistent for those who are non domiciled, for example, those UK residents who earn foreign income may not have to pay tax on it, for example capital gains tax.1

This House believes that such a settlement is unjust since the rule is used by notable wealthy individuals (who have considerable income from abroad) to avoid paying their fare share of taxation, for example the former governor of the Bank of England, Mark Carney and Chelsea FC owner Roman Abramovich.2

Therefore, this House calls for the government to introduce legislation to reform the tax codes, so that those who are resident in the UK should be subject to the same taxes on income earned both in the UK and abroad.

Notes

This motion simply seeks to make those who enjoy the benefits of living in the UK to pay tax on all of their wealth. The current arrangement is not fair when low income UK residents have to pay taxes on all their income. This will also mean they will have to declare their foreign income and assets and thus limiting the avenues of tax avoidance. Furthermore those who are resident in the UK often create their foreign wealth through the benefits that this country provides them. For example Premier League football players who often build wealth based on their image of being players in an English League.


1 https://www.gov.uk/tax-foreign-incom...iled-residents
2 https://www.taxjustice.uk/tax-takes-9.html
How would you evidence that people made foreign wealth because of the UK? Wouldn’t it be easy to manipulate these figures to show they don’t even if they indeed do?
I understand what the intentions of the motions are, but I think this could be just as problematic with tax avoidance as anything was beforehand.
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Miss Maddie
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(Original post by Moonbow)
How would you evidence that people made foreign wealth because of the UK? Wouldn’t it be easy to manipulate these figures to show they don’t even if they indeed do?
I understand what the intentions of the motions are, but I think this could be just as problematic with tax avoidance.
I think you're confusing what it's calling for. Claiming foreign wealth was made because of the UK is being used as justification. It wouldn't be used to decide if tax should be paid. Tax would be the default.

Here's an example of what the motion wants. If an amazing doctor transfers to the US for a year to lead some pioneering new treatment, she'll need to pay US income tax on the money she was paid in the US, UK income tax on her UK salary (assuming she still did some treatments in the UK and was paid) and UK capital gain tax on the money she was paid in the US. Under the current rules she would pay UK income tax and US incomes tax and that's it.
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Jammy Duel
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(Original post by Moonbow)
How would you evidence that people made foreign wealth because of the UK? Wouldn’t it be easy to manipulate these figures to show they don’t even if they indeed do?
I understand what the intentions of the motions are, but I think this could be just as problematic with tax avoidance.
It doesn't matter whether the wealth was "because of the UK", it is about money made overseas that remains overseas which currently does not get taxed if you have non-dom status. If you don't have non-dom status but are resident of the UK you are taxed on overseas income.
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Moonbow
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(Original post by Jammy Duel)
It doesn't matter whether the wealth was "because of the UK", it is about money made overseas that remains overseas which currently does not get taxed if you have non-dom status. If you don't have non-dom status but are resident of the UK you are taxed on overseas income.
(Original post by Miss Maddie)
I think you're confusing what it's calling for. Claiming foreign wealth was made because of the UK is being used as justification. It wouldn't be used to decide if tax should be paid. Tax would be the default.

Here's an example of what the motion wants. If an amazing doctor transfers to the US for a year to lead some pioneering new treatment, she'll need to pay US income tax on the money she was paid in the US, UK income tax on her UK salary (assuming she still did some treatments in the UK and was paid) and UK capital gain tax on the money she was paid in the US. Under the current rules she would pay UK income tax and US incomes tax and that's it.
Ah I see. Thank you both for the clarification
I can see there may be issues, but surely if this is money going towards helping those less fortunate in the UK it would be a positive? Could you possibly allow medical researchers or people within a NPO which are helping with such important work an exception to this? It would reduce tax collected, but it would ensure who it would be applicable to could keep their non-dom status? Then again, this might already have something similar in place I missed :curious:
Last edited by Moonbow; 1 month ago
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Jammy Duel
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(Original post by Moonbow)
Ah I see. Thank you both for the clarification
I can see there may be issues, but surely if this is money going towards helping those less fortunate in the UK it would be a positive? Could you possibly allow medical researchers or people within a NPO which are helping with such important work an exception to this? It would reduce tax collected, but it would ensure others could keep their non-dom status? Then again, this might already have something similar in place I missed :curious:
Given who is targeted the probable outcome would be less tax, not more.
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04MR17
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Is this a matter that could be solved by a bill?
If so, why haven't the Labour party written it?
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Iñigo de Loyola
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Nay. This would lead to double taxation which is a bad thing.
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04MR17
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(Original post by LiberOfLondon)
Nay. This would lead to double taxation which is a bad thing.
Why do you see it as a bad thing, out of interest?
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CatusStarbright
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Is the general principle not that you pay tax where the money has been earned?
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Jammy Duel
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(Original post by CatusStarbright)
Is the general principle not that you pay tax where the money has been earned?
International taxation is not simple and there is not one set of rules applied globally, as much as lots of accountants wish there were.

The one notable case I know of off the top of my head where there is double taxation is the US where all income globally is taxed BUT, and it's a big but, there is double tax relief involved
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Miss Maddie
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(Original post by 04MR17)
Why do you see it as a bad thing, out of interest?
Why would it be seen as a good thing?
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Iñigo de Loyola
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(Original post by 04MR17)
Why do you see it as a bad thing, out of interest?
Because the point of taxation is to ensure people fund communities and states which contribute to them earning money. Double taxation would mean that countries with no involvement in their business take a share of their profits which is, in my opinion, unfair.
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Jammy Duel
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(Original post by LiberOfLondon)
Because the point of taxation is to ensure people fund communities and states which contribute to them earning money. Double taxation would mean that countries with no involvement in their business take a share of their profits which is, in my opinion, unfair.
Erm....might want to look what non-dom status is all about...
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