The Government's £30,000 levy on non-domiciles who have lived in the UK for seven years will rise to £50,000, according to accountancy Grant Thornton.
Grant Thornton says non-domiciles will have to pay the levy, which comes into force in April next year, in addition to tax paid on remitted income. It says this means the levy will hit £50,000 if paid from funds which have already suffered at least a 40% tax charge.
Peter Ashby, director at Grant Thornton, says: “If the proposals are to increase the levy for individuals who have been in the UK for 10 years or more to £50,000, this would equate to £83,333 in gross terms.
“In addition, as it not a tax in the strictest sense, but a levy, the cost will not be able to be offset against other foreign tax liabilities. US citizens and green card holders living here will be bemused at paying UK tax which is not creditable against US tax."
Grant Thornton also says the Government has failed to consider the adverse impact the proposed tax changes could have on the economy, despite admitting 3,000 of the 20,000 people the changes affect will leave the country when the rules become active.
The Government expects to raise £350m through the levy in 2009 to 2010, which will fall to £200m in 2010 to 2011.
Grant Thornton highlights the gains would pale in comparison to the estimated £4bn in income tax non-domiciled individuals pay.
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