British Labour MP John McDonnell attends the Labour Party annual conference in Brighton, Britain September 21, 2019. REUTERS/Peter Nicholls
BRIGHTON, England (Reuters) – A Labour government would abolish ‘non domiciled’ status in its first budget, Britain’s main opposition party said on Saturday, as part of “a comprehensive plan to increase tax transparency and clamp down on tax avoidance and evasion”.
Non-domiciled tax status, which is governed by a complex set of rules dating back more than a century, allows some residents who register their permanent home as outside Britain to limit the tax paid on earnings abroad. They can also avoid inheritance tax on property by putting it into an offshore company.
In an interview with the Times newspaper on Friday, Labour’s finance policy chief John McDonnell raised the prospect of scrapping the arrangement, saying what the party wanted was a “fair taxation system”.
A Labour spokesman confirmed it would be abolished in the first budget of a Labour government, saying: “UK residents should pay their tax to support our public services and infrastructure.”
Britons could be heading to the polls for a national election this year in a bid to end the Brexit impasse.
Reporting by Elizabeth Piper; editing by Costas Pitas