FT.com

A survey on wealthy United Kingdom residents from the Indian sub-continent has found that almost half of them are preparing to leave Britain because of the proposed tax crackdown on non-domiciled people.

The poll of 50 high net worth individuals from India, Pakistan, Bangladesh and Sri Lanka by Grant Thornton, an accountancy firm, found 21 were actively planning their departure to avoid the tax changes.

Thirty-nine of the respondents said they did not have enough time to get their affairs in order to comply with the new tax rules. Residents from the four Asian countries make up the largest non-dom group in the UK, according to Anuj Chande, head of Grant Thornton's South Asia group, owning about £25b ($49b) of assets.

The 50 individuals surveyed, whose wealth ranged from £3m-£200m, were worth about £1b in total. Under the proposed changes, non-doms who have been in the UK for at least seven of the past nine years would have to pay a £30,000 annual charge to keep overseas income that is not remitted to the UK out of the British tax net.

The chancellor watered down the proposed changes earlier this week in response to intensive lobbying by business groups and City firms. Last week Lord Digby Jones, the former CBI director-general, who is now trade and investment minister, warned the scheme could damage London's status as a global financial centre.

However, there is still disquiet among non-doms and the organisations that employ them. In addition to the £30,000 charge, UK capital gains on assets held in offshore trusts - often used by non-doms to own British homes - would fall into the UK tax net, as would gains made in the UK by non-dom shareholders in foreign companies.

In addition to creating an exodus of non-doms, the new tax rules would discourage many clients from bringing their skills and entrepreneurial drive to the UK in the first place, Chande said. 'Individuals from the south Asia community have come to the UK to set up family businesses, contributing to the UK economy through corporation tax, PAYE and national insurance.

'In the relentlessly competitive area of attracting talented individuals, the government must appreciate that in 20 or 30 years it may be Singapore, Dubai or Zurich that will be home to a vast swathe of non-doms that could have been in UK continuing to help our economy grow.'

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