Appearing at this morning’s Treasury Select Committee, Professor Arun Advani argued that the Foreign Income and Gains (FIG) regime encourages “wealthy people to come here but not to invest here.”[1]
Advani, who is a Director at the Centre for the Analysis of Taxation (CenTax) and a Professor of Economics at the University of Warwick, told the Committee that:
“If you’re living in Dubai, and you invest in the UK, you get 0% capital tax. If you live in the UK, and are using the new regime (the FIG regime) or the old regime[1], you have 0% tax on investment anywhere in the world, except the UK. If you invest in the UK you pay the full rate of tax.”
Professor Advani argued that the system encourages those who want to invest in the UK to “go and live somewhere else… because that’s the way you can get a lower tax rate.”
Advani told the Committee, which was exploring possible tax options at the upcoming Autumn Budget, that reforming this would “improve growth and would improve incentives for people to come and stay.”
ENDS
Notes to editor
- The Foreign Income and Gains regime, or ‘FIG’, which replaced the remittance basis regime for non-UK domiciled individuals (the ‘non-dom’ regime) this year requires individuals to pay UK tax on worldwide income and gains after four years of UK residence.
- The Centre for the Analysis of Taxation (CenTax) is an independent research centre dedicated to improving public understanding of tax policy and helping to design a better tax system.
