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Post by racingteatray on Apr 10, 2022 17:38:38 GMT
I can’t help thinking of a scene where Boris Johnson is sitting there with a hand clapped to his forehead going “Cripes Rishi, when I said we needed to go non-Dom, that’s not really what I meant!”…
Personally, I’m no particular fan of Sunak’s what with him being a Brexitist and all that, but I’m just not sure I can get very excited about his wife’s tax status or whether he had a green card. Ok probably both a bit short-sighted of him politically, but not actually things that I view as huge breaches of propriety compared to other recent political scandals.
is it just me? Perhaps the rest of you are scandalised?
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Post by ChrisM on Apr 10, 2022 17:53:12 GMT
Personally I would have thought that all MPs would have to be domiciled in the UK, and a person's spouse should be domiciled in the same country as them
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Post by garry on Apr 10, 2022 18:17:48 GMT
She hasn’t done anything illegal and simply followed the rules to minimise her tax exposure. Would any individual not reduce their tax bill via all legitimate means? That’s all that should really matter, but it won’t be the end of it. The media will have a field day with this story - the numbers will be huge (she’ll have saved millions of pounds as a non-dom) and they’ll contrast this to the cost of living crisis facing ordinary punters. More broadly, I think there are legitimate questions as to the economic benefit that UK plc gets from individuals utilising non-dom status.
I’m no fan of Sunak. His stock value has been (until very recently) very high as if he’d performed some economic miracle through the covid pandemic. A miracle that is quickly unravelling as the country wakes up to the burden of debt he’s landed us with.
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Post by Big Blue on Apr 10, 2022 19:36:30 GMT
This story has been on the shelf for weeks and Sunak most likely told of it in the run up to the new tax year amid the pressure to not raise NI levels. He decided he could ride the bad press of both and lo! the story broke at the start of the new tax year in every media outlet. Legal or not legal the idea that the cabinet member responsible for the collection of taxes has a spouse that has non-dom status is repugnant to the man on the Clapham omnibus.
As to the Green Card thing: why is that an issue? My mum held hers for years after she’d left and our own Prime Minister had to renounce his place of birth to avoid him running off to run for POTUS.
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Post by Deleted on Apr 10, 2022 22:44:03 GMT
Apart from the opposition and the media wanting to crap on anything the blue party do while hiding their own failings under a hedge. Standard for Sheppey you could say.
If the wife was doing nothing illegal, what is the problem? The boys and girls from the red party are almost apoplectic in their demonstrations of outrage but how many of their own do the same thing and are thinking "shuck the fut up ffs".
I know but frankly the red party is for me, even less effective than ever and they were bloody dire before.
No, a face palm moment it is not, that bridge was crossed many moons ago.
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Post by johnc on Apr 11, 2022 8:52:18 GMT
Regardless of all the shouting from some quarters about the use of the non domicile status being disgusting, unfair etc etc, I see no problem with it. It is quite commonplace for those born overseas to use the non dom rules and it is completely legal.
It is no different than putting money into an ISA to avoid tax or perhaps topping up pension contributions to avoid higher rate tax.
In fact, any accountant who didn't point out the non dom rules to someone in Rishi's wife's position would be considered negligent and could easily be sued as a consequence.
I think it is really dangerous that a rhetoric is being created in the press which makes anyone who has wealth or is successful, some kind of leach and someone to be despised and not revered. Are we going to have the same venom applied to those who work for cash? - at the weekend I had a tree surgeon turn up in his logo'd van, offering to trim our trees and bushes for £300 and if we paid cash he could do it for £250. Electricians, joiners, roofers and plumbers are all the same, scamming society by putting cash in their pocket, evading tax, NI and VAT.
The man in the street might be appalled but unless he can, hand on heart, say he has never done anything to avoid tax (remembering that taking cash is illegal whereas being a non dom is not) then this is nothing but the destructive politics of envy yet again. If we can't celebrate someone's success then we won't have successful people and society will then gravitate towards the likes of Russia where the successful people are the big bullies.
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Post by Boxer6 on Apr 11, 2022 9:06:21 GMT
It's simply the 5th estate doing what they do best really, isn't it; stirring up a big pot of crap and waiting to see what happens when it hits the fan.
While I am far from a fan of the Tories, I'm not averse to anyone who can avoid tax legally - after all, my own father did so to my and my sisters' benefit. If she had evaded, then that would be a totally different story altogether, but Joe Q Public often fails to understand the difference - or chooses not to - in order to shout about it on Twatter or wherever.
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Post by PG on Apr 11, 2022 10:42:50 GMT
I do think Sunak's wife's tax status is an issue. For the very simple reason that being non-dom is intended for people who do not see the UK as their permanent home, but are here temporarily until they return to their place of domicile. Yes, there have been court case about what that actually means and wasn't Lord Ashcroft arguing a few years ago that intending to be buried overseas was enough? But it is important to look at what the letter of the law says and what the spirit says too.
What her being a non-dom says is that she and therefore (unless they are about to get divorced) her husband do not see the UK as their permanent home. Oh and in the meantime, they'll save millions a year in UK taxes. That's not a good "optic" for a Chancellor and wannabe PM. And that fact that he can't see that and somehow seems aggrieved makes his capability to hold a senior government position even worse.
The green card matters for the same reason. Whilst being Chancellor he could go and live in the US at any time of his choosing. Again, hardly a good look.
And I notice that the solution is not to give up her non-dom status, but just to pay UK tax on her overseas income. Somebody should tell him to stop digging.... Mind you I think the hole is deep enough now that it will cave in an bury him.
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Post by johnc on Apr 11, 2022 11:06:00 GMT
From HMRC:
"Working out your domicile
Your domicile’s usually the country your father considered his permanent home when you were born. It may have changed if you moved abroad and you do not intend to return."
Why would anyone want to give up their domicile if they might want to return to the home of their birth, perhaps in retirement. Such decisions on where an individual might want to live are surely the individual's to make and not for the State to dictate. She has also not been resident in the UK for 15 of the last 20 years otherwise she would be UK domicile under Condition B, so she hasn't exactly been here most of her life.
Also from HMRC's website:
"1. Impact of residence and domicile
1.1 This section is about the impact of your residence and domicile status on your Income Tax and Capital Gains Tax liabilities in the UK.
1.2 It’s important to know if you’re a UK resident or not. This may affect:
your UK tax liability
your entitlement to Income Tax allowances and exemptions
UK residence – tax liability
1.3 When you’re UK resident you’re normally taxed on the arising basis of taxation. This means that all your worldwide income and gains will be taxable in the UK. Therefore, even if your foreign income and gains have already been taxed in another country they will still be taxable in the UK and you must declare all of your foreign income and gains on your tax return.
1.4 In many cases, relief is given in the UK for foreign tax paid on foreign income and gains under the provisions of the relevant Double Taxation Agreements (DTAs) or via unilateral relief. There is more information about DTAs in section 10.
UK domicile – tax liability
1.5 If you’re UK resident but not domiciled in the UK there are special rules which might apply to your foreign income and gains. In these circumstances you’ve a choice of whether to use the arising basis of taxation or the remittance basis of taxation. If you choose to use the remittance basis for a tax year you will pay UK tax on:
any of your income and gains which arise/accrue in the UK
any of your foreign income and gains that you, or another relevant person, brings (or remits) to the UK, even if that remittance occurs in a later tax year
If you’re a long-term UK resident and you choose to be taxed on the remittance basis, you may also be liable to pay the Remittance Basis charge.
If you’re deemed domiciled in the UK because you meet either Condition A or Condition B, you cannot claim the remittance basis of taxation, and will be taxed on the arising basis.
Section 5 of this guidance gives more information about domicile.
5.21 From 6 April 2017 new deemed domiciled rules apply which change the way a previously UK resident but not UK domiciled individual is treated. An individual who is not domiciled under English common law will be treated as domiciled in the UK for tax purposes if they meet 1 of 2 conditions.
Condition A – the individual:
was born in the UK
their domicile of origin was in the UK
was resident in the UK for 2017 to 2018 or later years
Condition B – the individual:
has been UK resident for at least 15 of the 20 years immediately before the relevant tax year"
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Post by garry on Apr 11, 2022 11:06:42 GMT
What her being a non-dom says is that she and therefore (unless they are about to get divorced) her husband do not see the UK as their permanent home. Oh and in the meantime, they'll save millions a year in UK taxes. That's not a good "optic" for a Chancellor and wannabe PM. And that fact that he can't see that and somehow seems aggrieved makes his capability to hold a senior government position even worse. I'd not thought about it like that. It's a very good point
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Post by PG on Apr 11, 2022 12:15:36 GMT
From HMRC: "Working out your domicile
Your domicile’s usually the country your father considered his permanent home when you were born. It may have changed if you moved abroad and you do not intend to return."Why would anyone want to give up their domicile if they might want to return to the home of their birth, perhaps in retirement. Such decisions on where an individual might want to live are surely the individual's to make and not for the State to dictate. She has also not been resident in the UK for 15 of the last 20 years otherwise she would be UK domicile under Condition B, so she hasn't exactly been here most of her life. Also from HMRC's website: Yes, she has not broken the letter of the rules. But so what? The opening statement, "..It may have changed if you moved abroad and you do not intend to return" simply reinforces the point that she (and therefore by inference Rishi himself) do not view the UK as their permanent home. Oh and in the meantime we'll save millions in tax. That's hardly a good look for a wannabe PM. "I want to be PM, but I won't be here permanently, just whilst it suits me and my family".
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Post by racingteatray on Apr 11, 2022 12:36:08 GMT
I’m not sure I care whether my PM intends to remain here permanently. If Theresa May retired from being an MP and went off to live in Provence, that wouldn’t concern me even remotely.
I’m reading an interesting book by Anthony Seldon at the moment entitled “The Impossible Office? The History of the British Prime Minister”.
In it there is comment ascribed to William Hague who notes that once upon a time, Prime Ministers were chosen based on their being the person in Parliament best placed to effectively conduct the business of governing the country.
Provided the PM indeed governs the country effectively (which I would interpret as meaning “competently and in the best interests of the country as a whole”), then as far as I’m concerned they can live where they want afterwards.
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Post by johnc on Apr 11, 2022 12:45:02 GMT
I don't think retaining domicile in any way says you do not intend to remain in the UK. What it says is they just want to keep their options open. People very rarely have the same goals, desires, intentions when they are 75 compared to when they were 40. Things change over time and if it were me I would want to keep that door open in case circumstances dictated at some point in the future, that I might want to retire elsewhere.
We don't know anything about the Sunak's relationship and Mrs Sunak might be fearful that Rishi will divorce her - she might want the option to leave the country to be closer to her immediate family if that happens. Who knows? There might be a hundred other reasons for her to keep her non dom status but none of them make what she has done, wrong.
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Post by Bob Sacamano v2.0 on Apr 11, 2022 13:57:39 GMT
As I understand it Mrs Sunak has always said that she would be moving back to India to be with her parents when they became elderly and in need of care. I'm sure they can afford all the care they need but it is a thing of honour in Indian families that they look after ageing parents.
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Post by Tim on Apr 11, 2022 15:29:38 GMT
It's hard to argue with someone using every advantage to save some tax - we'd ALL do it if it was worthwhile.
As PG says though it's not a good look for the chancellor to be involved in it.
However, the whole concept of non-dom status feels very old-fashioned now. I've got to be honest I've never really understood it but it comes across as being pretty beneficial to those with a LOT of money but that's possibly because those are the only cases you hear about. I'd certainly like someone to turn a very big spotlight on Lord Rothermere who also has non-dom status due to, apparently, some decision his father made in the 1970s. Given that his lordship owns the Daily Mail with all of its views on them there foreigners it comes across to me as being a very hypocritical position to accept.
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Post by Big Blue on Apr 11, 2022 16:32:47 GMT
………it's not a good look for the chancellor to be involved in it. The legality of the matter doesn’t enter into it, this is the only pertinent matter, more so at the time everyone is being asked to chip in a bit more for a frankly intangible benefit at the time of drooling regression (ok, a bit harsh but you get my drift). It would have been better for the economy and the taxpayer if the rules on euthanasia had been altered instead of hiking the NI rate (again, accept that’s harsh…..). My own tax return includes the repayment of the child benefit my wife gets* so someone related to the head of the department that drives that policy not chipping in on all their earnings isn’t a matter of legality but one of “doing as I say not what I do.” *we leave it that way because I’ll have stopped earning before they reach the end of eligibility so it avoids having to do a reclaim in the future before you ask.
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Post by Bob Sacamano v2.0 on Apr 11, 2022 18:28:46 GMT
It's hard to argue with someone using every advantage to save some tax - we'd ALL do it if it was worthwhile. As PG says though it's not a good look for the chancellor to be involved in it. However, the whole concept of non-dom status feels very old-fashioned now. I've got to be honest I've never really understood it but it comes across as being pretty beneficial to those with a LOT of money but that's possibly because those are the only cases you hear about. I'd certainly like someone to turn a very big spotlight on Lord Rothermere who also has non-dom status due to, apparently, some decision his father made in the 1970s. Given that his lordship owns the Daily Mail with all of its views on them there foreigners it comes across to me as being a very hypocritical position to accept. I’m assuming half the footballers in The Premiership are non-doms.
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Post by Big Blue on Apr 11, 2022 19:23:00 GMT
Most footballers are directors of limited companies or employees of companies neither in the UK nor paying them in the UK. Mr Viera, for example, is the manager of Crystal Palace. He is paid by the company that owns Manchester City.
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Post by johnc on Apr 12, 2022 8:24:28 GMT
I’m assuming half the footballers in The Premiership are non-doms. They might be non doms but they will be taxed in the UK on all they earn in the UK
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Post by johnc on Apr 12, 2022 10:53:33 GMT
Most footballers are directors of limited companies or employees of companies neither in the UK nor paying them in the UK. Mr Viera, for example, is the manager of Crystal Palace. He is paid by the company that owns Manchester City. That stopped working years ago. If you work in the UK on any permanent basis you will be taxed in the UK regardless of who pays you.
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Post by Big Blue on Apr 12, 2022 11:14:26 GMT
Yes: but the words “permanent basis” offer the loophole. If you’re a midfielder you’re only one until the next one arrives. There will no doubt be an element of a footballers remuneration classed as earned in the UK but a lot will be earned by some other financial vehicle.
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Post by johnc on Apr 12, 2022 11:21:58 GMT
Yes: but the words “permanent basis” offer the loophole. If you’re a midfielder you’re only one until the next one arrives. There will no doubt be an element of a footballers remuneration classed as earned in the UK but a lot will be earned by some other financial vehicle. It's mostly media rights which get paid overseas but HMRC is on this and they still get taxed. Technically any sports person competing in the UK has to pay UK tax on their earnings as do pop stars etc. Occasionally HMRC will do a deal in special circumstances but normally these people all have to pay their tax here for the time they are in the country. HMRC's interpretation of permanence no longer bears any relationship to the one found in the Chambers English Dictionary.
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