On Monday, George Osborne thrilled the Conservatives with his promise of an end to inheritance tax as we know it, and he promised to fund this promise with a £25,000-a-year levy for the privilege of non-dom status. He claimed that this could raise up to £3.5 billion.
Osborne?s pledge has triggered a furious political row over non-dom numbers. Broadly defined, non-doms include all foreigners in Britain. No one knows how many there are, let alone how many would find it worthwhile to pay the levy rather than pay UK tax on all their worldwide income. The Shadow Chancellor put the figure at 150,000. Labour hit back with 15,000 ? but the Treasury has since disowned the smaller figure, and so has much of the high-end accountancy profession.
?Labour?s numbers are nonsensical,? says Mike Warburton, of the City firm Grant Thornton. On the basis that the numbers filing tax returns as non-doms nearly doubled to 112,000 between 2003 and 2005, he finds an estimate of 150,000 to 200,000 for 2007 ?entirely reasonable?. More to the point, Warburton believes that at least 120,000 of these will have enough foreign assets to want to protect them by paying the levy rather than UK tax.
One-nil to the Tories, then. But what do the non-doms themselves make of paying £25,000 a year for a status that they have enjoyed free of charge for decades?
And who are they?