Only in Britain would we give tax breaks to super rich foreigners and tax domestic citizens. Obviously, if we offer tax incentives for people to move to the UK, people will come and drive house prices up. Moreover, there is no obvious benefit to the UK from this ridiculous scheme; tax revenues are reduced, house prices increase, while homes are largely left empty.
An international elite is pricing British citizens out of the housing market with the help of government tax breaks for foreigners living in the country, figures reveal. More than half of London’s multimillion-pound houses are now bought by “nondoms” (nondomiciles) who, unlike most British citizens, are able to use offshore trusts to pay far less stamp duty.
Economists say that the new boom in house prices in the capital fuelled by foreign money is rippling down the market, making it harder for first-time buyers to get on the property ladder.
Gordon Brown will come under pressure today to justify the rules, which critics claim create a double standard. The Government exempts nondoms from tax on their international earnings, even though in most cases their home countries do not tax them either. While it tends to be wealthy foreign citizens who take advantage of the rules, many British-born people can also declare themselves nondom, on the ground that their family origins and “cultural ties” lie overseas.
Government figures show that there were 112,000 nondoms in 2005, an increase of 74 per cent from three years before, and accountants believe that the figures are continuing to rise rapidly. The Treasury says that it does not know how much tax they are able to save on their overseas earnings each year.