New British tax pushing foreigners to pack

U.S. corporate officers in Britain are preparing to exit the country to avoid paying a new British tax imposed on non-domiciled residents.

The Telegraph reported Monday there are about 120,000 non-domiciled residents in Britain. Many face a possible flat tax of $44,500, which wouldn't count as a write-off against their U.S. taxes.

Non-domiciled residents are those paying no taxes on earnings made outside of Britain.

Anyone who has filed for non-dom status in seven of the past 10 years is subject to the tax.

Talks with the U.S. Internal Revenue Service to suspend or alter the new British tax broke off last week with no progress made, the report said.

British Revenue and Customs is expected to clarify some of the tax rules this week amid an outcry that has U.S. corporate officers relocating to Ireland and Switzerland.

Nigel May, a senior accountant at MacIntyre Hudson, told The Telegraph, the non-dom saga has been an act of economic folly. Just as countries around the world are opening their doors to the international mobile wealth creators, Britain is pulling up the drawbridge.

Critics have asked for a one-year suspension of the tax, which takes effect in April.

Copyright 2008 by United Press International