Darling non-dom plan 'to cost £2bn'

The chancellor's plans for a tax clampdown on non-domiciled foreigners will cost the Treasury money, a new study has claimed.

Alistair Darling's announcement in the pre-Budget report last year that those people living in the UK but not paying tax on money outside the country would pay a £30,000 annual levy, was designed to bring in extra revenue, as well as equity to the system.

However the Society of Trust and Estate Practitioners said the charge will actually cost £2.1bn a year as many residents choose to leave the country.

Opponents claim 116,000 non-doms are mostly not tycoons but bank, hedge fund and private equity staff who bring investment and prosperity to Britain, but could easily choose to move.

Meanwhile the FT says the US is lobbying hard to persuade the Treasury to change the wording of its legislation to ensure the charge falls within the scope of a treaty designed to avoid double taxation.

However the Treasury says the final details of the plan are not fixed, meaning changes could be made in next month's Budget.