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Lord Ashcroft Reveals Non-Dom Status

Monday, March 1, 2010

Lord Ashcroft, the deputy chairman of the Conservative Party, the largest opposition party in the UK parliament, has released a statement confirming that he is non-domiciled in the UK for tax purposes.

Ashcroft, who is a major financial backer to the Conservatives, issued his statement following increasing speculation over the nature of his tax affairs, given his extensive business interests in Belize.

Ashcroft was awarded a peerage in 2000, entitling him to sit in the House of Lords, the upper chamber of the UK parliament, but pressure on him to reveal his residence and domicile status has risen in recent weeks in the light of Conservative leader David Cameron's insistence that anybody taking a seat in Parliament must be treated as resident and domiciled in the UK for tax purposes.

'Non-dom' status is typically claimed by those born outside of the UK but who are long-term residents of the country. It means that while they pay tax on their UK earnings, their foreign earnings are not subject to UK tax as long as it remains offshore.

"I am making this statement in advance of the release by the Cabinet Office of limited information about the award of my peerage and of the undertakings I gave at the time," reads Ashcroft's statement, which continues:

"The undertakings I gave were confirmed in a memorandum to (then Tory leader) William Hague dated 23rd March 2000. These were to 'take up permanent residence in the UK again' by the end of that year. The other commitment in the memorandum was to resign as Belize's permanent representative to the UN, which I did a week later."

"In subsequent dialogue with the government, it was officially confirmed that the interpretation in the first undertaking of the words 'permanent residence' was to be that of 'a long term resident' of the UK. I agreed to this and finally took up my seat in the House of Lords in October 2000. Throughout the last ten years, I have been declaring all my UK income to HM Revenue."

"My precise tax status therefore is that of a 'non-dom.'"

Ashcroft's statement pointed out that two peers belonging to the governing Labour Party - Lord Paul (recently made a privy councillor by the Prime Minister) and Sir Ronald Cohen - are both "long-term residents" of the UK, but also claim 'non-dom' status.

However, Ashcroft stated that he agrees with Cameron's assertion that anyone sitting in the legislature must be fully resident and domiciled in the UK for tax purposes.

"I agree with this change and expect to be sitting in the House of Lords for many years to come," his statement concluded.