Friday, August 12, 2022

Sajid Javid “exploited a Non-Dom tax loophole” while working at the Treasury

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Sajid Javid used a tax loophole to take advantage of non-Dom perks while working as a ministerial assistant at the Treasury. LatestPageNews understands.

The Conservative leadership hopeful, who called for closer scrutiny of candidates at the start of his campaign on Monday, only wanted to say he relinquished controversial tax status “before entering public life” and refused to answer further questions about his tax affairs respond.

But according to sources familiar with Mr Javid’s tax planning, while the former health secretary gave up his non-dom status in 2009, he retained some of the tax benefits of an offshore trust until 2012. This move, which is perfectly legal, did not allow him to pay UK income tax on some foreign investment income. From 2011, Mr. Javid worked at the Treasury Department as Assistant Secretary to then Chancellor George Osborne.

While MPs may not use Non-Doms on a so-called personal basis, either for income or inheritance tax purposes, they can still benefit from them through trusts. According to tax experts, trusts are legal entities in their own right, just like companies.

Dan Neidle, founder of Tax Policy Associates Ltd said LatestPageNews: “Non-Dom status expires after 15 years. It is common planning for Non-Doms approaching this limit to place their foreign property in an Excluded Property Trust. This effectively preserves the benefit of Non-Dom status forever.”

“In my opinion this is tax avoidance – Parliament intended for non-dom status to end and this is a loophole that avoids that outcome,” he added.

Mr Javid has declined to say what his trust was based on, but said it was only dissolved in 2012, when he had already started his political career and was serving as PPS – the eyes and ears of the then Chancellor.

When asked about his historical tax residency, he told reporters Monday: “I will not elaborate on my tax matters, which had to do with a period when I was not in public life. I have not been a resident in all my time in public life.” Addressed separately by LatestPageNewsMr Javid’s spokesman declined to comment on the use of Non-Dom perks as an MP.

The tax status of contenders for the leadership was then in the spotlight LatestPageNews revealed HMRC experts were investigating Chancellor Nadhim Zahawi’s financial affairs. Earlier this year, his predecessor Rishi Sunak, now front runner in the leadership, faced questions when it was revealed his wife Akshata Murty had used non-dom status.

Asked about the release of his tax returns on Sunday morning, Mr Javid said: “I have no problem with such transparency. I think if I finish in the bottom two, the bottom two candidates should be pretty open about their tax affairs.”

Meanwhile, Mr Zahawi has vowed to “answer any questions HMRC has from me” and to publish his accounts annually if he succeeds Boris Johnson in 10th place. Mr. Sunak has yet to comment on the release of his tax details.

The so-called non-domicile on remittance basis allows individuals to pay UK tax only on their income earned in the UK, rather than on their total worldwide income like ordinary citizens.

Mr Javid said on Sunday he used Non-Dom status for his tax returns for about “four or five years” in the 2000s.

The then-cabinet minister said in a statement on tax affairs in April this year that he dissolved a trust when he became a government minister in 2012 and paid 50 percent income tax “on that property” – the “maximum possible tax burden”. This would have negated any accrued tax benefits, he said.

He has also said repeatedly that he always provided the information requested by tax, government and parliamentary authorities.

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