THE BIGGEST TAX HAVEN IN EUROPE
September 17, 2007
Under an obscure piece of British tax legislation, anyone who lives in Britain but was not born there need only pay taxes on the small amount of money they bring into the country every year, and not on their worldwide earnings, according to Bloomberg News.
In effect, the tax status -- known as "non-domiciled" -- has made London a tax haven for everyone from Russian oil tycoons to international investment bankers. According to figures compiled by the British Treasury:
- There were about 112,000 people claiming non-domiciled status in the year through April 2005.
- Although they reported a total of £9.8 billion (about U.S. $19.9 billion) in earnings, their wealth from overseas income would be much more.
Some people are not happy about the situation. In a recent report the Trades Union Congress, which represents 7 million workers in 66 unions, argued that closing the loophole could help raise the £4 billion (about U.S. $8.1 billion) the government needs to meet its pledge of halving child poverty by 2010.
Source: Matthew Lynn, "The biggest tax haven in Europe is not what you might expect," International Herald Tribune, September 13, 2007.
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