Regarding your article “How the UK’s non-dom status works” (Report, April 9), I do not believe that the non-dom exemption “was intended to protect colonial investments and allowed UK residents to be taxed only on money brought into the country”. These people would have had a UK domicile, so the foreign exclusion would not have applied.
My understanding is that the difference between domiciliation and residency was implemented to capture colonial investments in British inheritance tax — ie, the person may not be resident in Britain, but with a British domiciliation would be subject to IHT.
The mirror image of this interpretation is that UK residents deemed to have their permanent home, or “domicile”, outside the country may not need to pay UK tax on foreign income or capital gains.
John C Mowinckel
London SW5, UK
Letter in response to this letter:
Non-dom tax isn’t the only colonial hand-me-down / From William Claxton-Smith, London N5, UK