UK residents who can claim that their real long-term home is somewhere else — perhaps in their family suite in Monaco, or they plan to be buried in the Cayman Islands — are termed “non-domiciled”, and spared the indignity of paying UK tax on their worldwide income. This includes people who were born and lived their whole lives in this country, if their father was foreign (or himself non-domiciled). This last is particularly galling to the ordinary taxpayer.
Now Labour has vowed to do away with the whole farce, leaving the Tories spluttering about the cost to the economy of driving away wealthy job-creators. What’s fascinating is to see Conservatives suddenly arguing that foreigners are making useful contributions to Britain, even if they are benefit cheats tax avoiders. Sure, some wealthy foreigners are probably making a positive contribution to the UK economy, while others are primarily competing with local people for scarce housing. In that they are a lot like non-wealthy foreigners, if we replace “housing” with “jobs”: some make a net positive economic contribution, some don’t.
But no one is suggesting that we really need to make sure that we retain any loopholes that allow impecunious immigrants to claim benefits in ways that seem contrary to any intended purpose or basic civic morality, because otherwise they might leave.
Common Infirmities 