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Australians moving to UK could pay tax on Australian earnings under Labour


Shadow chancellor of the exchequer Rachel Reeves said working Britons were seeing their taxes go “up and up and up” while wealthy foreigners were relying on an outdated tax exemption to avoid paying their fair share.

“We would have rules for people who are temporarily in the UK for a short period of time, in Germany and in Canada, that is six months, in Canada, it’s five years,” Reeves told Britain’s Sky News.

Shadow Chancellor of the Exchequer Rachel Reeves.

Shadow Chancellor of the Exchequer Rachel Reeves.Credit:Press Association

“We’ll consult to get that right but I’m very clear, the non-dom status that exists today will not exist with a Labour government.

“If you make Britain your home, you should pay your taxes like everyone else,” she said.

Reeves rejected suggestions that restricting the tax exemption would deter entrepreneurs from relocating to London.

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“In the US, you pay full taxes from day one and no one would suggest that the US is not welcoming of investment and entrepreneurs,” she said.

Labour said around 75,000 people in the UK currently claim the tax exemption and 2000 of them had opted to pay a one-off fee worth £30,000 ($AU53,300) that allows them to continue protecting their overseas income from British tax collectors for another eight years.

Earlier this month, a study by the London School of Economics and University of Warwick found that one in five top-earning bankers claim non-dom status and that it was overwhelmingly used by the rich with the fastest take-up by those relocating from China and India.

The study found that most non-doms live in London and the home counties, and that within London, they tended to live in the most expensive districts, with more than one in 10 residents of Kensington and the cities of London and Westminster having claimed non-dom status at some point.

Reeves’ proposal is not new. Former British Prime Minister Gordon Brown proposed a similar scheme when he served as the chancellor of the exchequer but abandoned the idea.

Former leaders Ed Miliband and Jeremy Corbyn both pledged to go further and abolish the tax status for foreigners altogether.

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