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The CIOT has called for capital gains tax changes for trusts and companies set up by those who enjoy non-domiciled status in the UK to be deferred until a proper assessment can be made of the impact on the economy.
CIOT spokesman John Barnett said: 'As well as introducing a £30k-per-annum charge for non-doms, the Pre-Budget Report proposals also made vague reference to extending certain anti-avoidance provisions, which do not currently affect non-doms.
'Although it is not entirely clear, we understand that under this heading the Government may be contemplating changing the CGT treatment of offshore trusts and companies set up by non-doms.'
He added: 'While it may be tempting to seek to raise additional tax from non-doms in this way, it needs to be recognised that the non-dom population is, by definition, highly internationally mobile, and in many cases can choose to invest in foreign, rather than UK, businesses and assets.'
The CIOT is concerned that if there are changes of the type mooted, there will be no additional tax raised.
John Barnett remarked: 'There is a significant danger that non-doms will move their investments out of the UK and potentially even relocate altogether. The loss to the UK economy as a whole might be substantial.
'The City of London could be particularly affected, as could other specific sectors such as the international art market, which could easily relocate to New York or elsewhere.'
The CIOT believes potential changes of this sort are of an different magnitude to the £30k proposals and should not be enacted without careful study of the economic effects.
The organisation hopes that, if the suggestions as to the direction of change are indeed correct, implementation of any proposals is deferred to allow for 'proper' study and consultation.
