British PM ready to scale back plans for tax blitz on nondomes

Unlock Editor's Digest for free

FT editor-in-chief Roula Khalaf picks her favorite articles from this week's newsletter.

British Prime Minister Rachel Reeves is prepared to scale back her budget's tax blitz on bidom amid Treasury concerns that some measures may fail to be funded, according to people familiar with the matter.

Reeves had hoped to raise around $1 billion a year by boosting former Tory Prime Minister Jeremy Hunt's plan to end tax breaks guaranteed to wealthy foreigners who live in the UK and claim their permanent home or address is overseas.

But government officials stressed Thursday that no final decision has been made, even as Reeves said the plan would be reviewed ahead of the Oct. 30 budget if the numbers don't add up.

It comes amid warnings from advisers that thousands of wealthy foreigners with non-resident status are planning to leave the UK.

A government official said, “We are reviewing the proposal in detail.” We will be pragmatic, not ideological. We're not going to keep trying anyway. But we won't give up on this completely.

Treasury officials worry that some of the government's planned non-governmental crackdowns may fail to generate additional revenue as beneficiaries of current tax breaks seek more favorable tax jurisdictions.

Hunt has pledged to implement reforms starting in April 2025, scrapping the non-state tax system in March and raising tax revenues by $2.7 billion by 2028.

The current system allows people who live in the UK but say their residence is overseas to pay UK tax only on UK income and capital gains. They do not pay UK tax unless they bring foreign income or gains into the UK.

Labor has pledged to withdraw concessions from Hunt's plan to abolish non-state status, including UK inheritance tax protection for foreign income and trust income. The Conservatives have also proposed a 50% tax break for non-nationals bringing foreign income into the UK in 2025-26.

Labor has calculated that a tougher crackdown on the non-state class would cost more than $1 billion in taxes in the first year.

Reeves has been flagged by colleagues as wanting to end non-dom status and move beyond Hunt's plan, but she is still working out details, including inheritance tax.

The Treasury characterized this as speculation and said Britain's fiscal watchdog, the Office for Budget Responsibility, would certify the costs of all measures announced in the Budget.

This will eliminate inequities in the tax system and replace the outdated non-state tax system with a new, internationally competitive residency-based system, he added.

Reeves has pledged to stick to his own fiscal rule that public debt as a percentage of GDP will fall within five years. This means she is constrained by OBR forecasts about the effectiveness of tax and spending policies.

Hunt said: It wouldn't be surprising if Labor's policies failed to raise money. Because Labor, as always, fails to understand the importance of globally competitive tax rates to our economy.

Labour's Bedom policy was an election manifesto pledge aimed at raising money to fund more NHS hospital and dental appointments and school breakfast clubs.

The party said it would end a common tax planning method used by wealthy foreigners living in Britain, shortly after Hunt pledged to abolish non-dom status. They place their foreign gains and income in a trust, shielding the money from UK inheritance tax indefinitely. .

The Conservatives have said trusts that exist in April 2025 will not be liable for inheritance tax. Labor, by contrast, said all existing trusts should be held accountable.

Labor has also proposed that individuals would be liable for UK inheritance tax after 10 years of residence, and would continue to pay tax for 10 years after they leave the UK.

Tax experts said the relaxation of these measures would be welcomed by current non-domestic and potential newcomers.

Rachel de Souza, partner at accountancy firm RSM, said a slight tweak to the government's inheritance tax stance would go a long way to preventing the exodus.

Sophie Dworetzsky, partner at law firm Charles Russell Speechlys, said the government's inheritance tax proposals were a rejection of non-doms.

She said the 10-year inheritance tax tag and the fact that existing trusts that people thought were not protected from IHT were absolutely barking.

Additional reporting by Sam Fleming

Sources 1/ https://Google.com/ 2/ https://www.ft.com/content/7c0bf2de-fb6c-4e05-a760-d5e8da0152fd The mention sources can contact us to remove/changing this article

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos