UK's new tax to affect foreigners

The uniform annual tax of 30,000 pounds proposed to be imposed on non-domiciled wealthy foreigners, includings some Indians, may force many of them to shift their headquarters from the UK.

Chancellor Alistair Darling said that non-domiciled residents would each be subject to a tax of 30,000 pounds a year and it would come into force from April, The Sunday Times reported.

The Tories said the UK fund management industry, a key employer in the city, would be severely damaged because of changes to rules on offshore trusts held by non-domiciled residents.

The richest non-domiciled resident in the UK is Lakshmi Mittal, the NRI steel baron, whose wealth is estimated at 19.25 billion pounds. Others include Sir Ronald Cohen, adviser to Prime Minister Gordon Brown; and Lord Swraj Paul, NRI industrialist and British Ambassador for Overseas Business, the report said.

Andrew Tailby-Faulkes, tax partner at Ernst and Young Tailby-Faulkes, said: "I am not normally given to hyperbole, but it's very difficult not to read these proposals as sounding a death knell for the UK as jurisdiction of choice for ultra-wealthy families."