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Non-Domiciled Tax Status

Volume 408: debated on Tuesday 7 October 2003

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If he will review the treatment of those claiming non-domiciled tax status.[124648]

In the 2002 Budget, the Chancellor announced a review of the residence and domicile rules as they affected the tax liabilities of individuals. That work is continuing. A background paper was published on Budget day 2003. It provides a framework for further analysis and discussion so that any specific options for reform are based on the widest possible understanding of their effect.

I am grateful for that, but we were promised opinions and proposals in the November 2002 pre-Budget report. It is taking a long time to provide them. Does the Paymaster General accept that ordinary, decent, hard-working people in my constituency who pay their taxes in full find it a little rum that a few multimillionaire freeloaders pay next to nothing?

The hon. Gentleman follows the debate closely and he therefore knows that the rules are broadly unchanged since the early 19th century. In the absence of guidance, they have largely built up through case law. Consequently, the current rules are complex and, as he says, poorly understood. They do not reflect the realities of today's integrated world. In taking forward the review and examining all the questions, including the hon. Gentleman's, it is vital that the outcome is fair, clear, easy to operate and supports the competitiveness of the UK economy, for his constituents as well as mine and those of other hon. Members.