Dalya Alberge, Arts Correspondent
We've made some changes
to The Sunday Times

The British public will miss out on seeing some of the greatest works of art in the world because of the Government’s tax plans for nondomiciled foreigners, the director of the Tate said yesterday.
Such is the alarm about the proposed legislation for foreigners who are resident in Britain that many of the wealthiest individuals, who are some of the most generous philanthropists of the museum world, plan to abandon Britain.
Under the proposed changes bringing art into Britain will, from April, involve a tax charge of 40 per cent of the art’s value. Rules that will prevent a non-domicile from bringing art into the country without having to pay tax could damage exhibitions.
Sir Nicholas Serota said that the loss of non-domiciled foreigners living in Britain will have a devastating impact on the nation’s museums and galleries. The purchase of key works for collections will come to an abrupt halt and funds for building projects, such as the planned £215 million extension to Tate Modern, will dry up.
Tate Modern, which attracts more than five million visitors a year, could never have been built for £134.5 million without the help of non-domiciles, Sir Nicholas said. The renovation of galleries in the Victoria and Albert Museum could also be halted, Mark Jones, its director said.
A leading arts benefactor who insisted on anonymity, told The Times: “The Tate will get slaughtered. Look through their [list of] donors. There are hardly any British people. Tate 2 is never going to get the money. The Government has no idea what they’re unleashing. The largest donors to the Tate, the Serpentine, the Victoria and Albert, the Ashmolean are populated by foreigners. They will simply leave the country now.”
Five of the largest donors at the Tate are non-domiciles. They include Noam Gottesman, an American businessman and noted collector. He is believed to have given more than £1 million to Tate Modern’s construction and he bought a variety of art to fill the galleries – notably Untitled (Rooms) by Rachel Whiteread, a Turner prizewinner.
One observer said that non-domiciles head to whatever city offers them the most favourable financial conditions and do their bit for the community. In the past 20 years London has attracted them but they are now focusing on Geneva and New York.
Sir Nicholas said: “My fear is that people who have works in the collection will take them out simply out of fear of what is to come.”
New ‘nom-dom’ rules
— From April 5 non-domiciled residents who have been in Britain for seven years must pay an annual fee of £30,000 if they want to be exempt from tax on their offshore income and gains
— Those who take advantage of this exemption will lose their personal allowances for income tax and capital gains tax
— Those who also pay tax in foreign countries won’t get credit for the £30,000 fee
— Tax will be levied on any gains from offshore trusts – this will be backdated for ten years
— All noncash assets, such as art and jewellery, brought into the country will be taxed – this will be backdated indefinitely
— All days spent travelling, where a passenger passes through Customs, will be counted as a day in Britain. Those who spend more than 183 days in the tax year in Britain are deemed to be resident
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You're all missing the point. The UK is increasingly a country of immigrants. Domicile follows the father so even children (and grandchildren) of immigrants can claim non dom if they are well informed .The massive potential leakage of tax revenue dwarfs the 'philanthropic' gifts of the mega wealthy to their favourite hobby.
Only the Uk and ireland use the concept of domicile to confer tax benefits.
james, perth, australia
I don t know what may be the position here. What I do know for certain is that the whole environment is obscure and that the people setting the rules haven t failed to consider any facts that might be presented in an article like this. In the first place, most of these non domicile s fortunes are tied up with this country in some way or another, so I don t think your fears will prove to be substantiated. There might be less flexibility in the approach to funding requirements but they are unlikely to be more difficult to meet than at present. The money is around in one form or another.
Henry Percy, London, UK
This government is weak and stupid. It wants to appease its own socialist tendencies and that part of the electorate that is motivated by envy of others. In my view, the overwhelming case is that the res-non-dom rules have enriched this country and dismantling those rules (even partly) will set London and the country back hugely even taking 0.25% off growth in the longer run. We will all be poorer because some couldn't get their emotions under control.
Andy G, London, UK
Personal tax is in essence the liscence to stay in this country, if you are a tourist then you should not be expected to be paying direct taxes, any other reason, you should start paying proportionate UK tax wherever the income is declared to come from. If they dont, we, the domiciled tax payer, pays their contribution and this is not philanthropic (some tax is paid towards culture, not much admittedly). These wealthy individuals come as non-domiciled to the UK and London in particular because the place offers an interesting and protected environment. Should they elect to leave for tax reasons, then fine. As for philanthropy, there are not that many wealthy individuals who understand the arts and culture, just as the people who encouraged selling sub-prime money they are fueled by greed. So, to encourage giving by the weathy, I can only suggest that you give them a tax break in return to satiate their greed motivation. Perhaps we should have a Art & culture tax on the corporations.
Richard, Bath, UK
Do we think we are the center of the art world and there are no fabulous alternatives? I was so sick of this 'fleece the rich, hang the consequences' attitude that I left the U.K. and came to America - sure there are problems here but looking a gift horse in the mouth is not one of them.
Which bright spark thought this policy up? Clearly not one with any vision or care as to what this will do to keeping Britain as a leading art power. Should other nations stand idly by as their art exports are taxed at 40% when entering the U.K. or should they reciprocate and slap a prohibitive massive duty on British art exports coming into their countries?
If this comes into law as proposed Britain is handing other world powers a golden opportunity to leapfrog our carefully honed position in the art world that has taken centuries to create.
This policy is pathetic and wreaks of envy, which, I am ashamed to say, is something that Britain can rightly claim to be the world leader at.
Another disgrace!
Peter, New York, USA
Has the Queen paid any tax recently. I remember she was "thinking about it".
It would seem sensible to drag a few quid in from this source whilst the government is at it.
Phill, Manchester, England
The proposed tax changes will make England less attractive to a number of international businessmen , not enough to make all of them leave but certainly enough to make some of them leave.
In these slightly uncertain times most businessmen are interested in saving money or building reserves - thus they are less interested in the oppertunities this country provides rather the savings that they can make.
Before the government runs the risk of making a decision which will be almost impossible to reverse it should FULLY understand the implications.
Personally I do not believe that this decision could have been studied in sufficient depth , in the time it was brought up by the Tories and stolen by Labour
ahacking, Monte Carlo, Monaco
I am highly unlikely to fall in to non-dom category. However much as been made of the allegation that these people pay no tax. Really?. How do they avoid VAT, Fuel Tax, Stamp duty, legal costs etc . I suspect they spend more here than the average Brit, and must pay a significant amount of tax, the receipts of that will vanish with them. I would guess the average high spender pays more than 30k in taxes
KW, Bognor Regis, England
Wait a while,this Government specialises in U turns once the blind spot in their thinking is pointed out to them.
robert everitt, wolverhampton,
This new new tax ruling is possibly one of the most badly concieved, ridiculous ideas - the potential impact for the UK economy is potentially devastating and it comes along at a time of unprecedented economic uncertainty. The whole idea has been borne out of jealousy and a total lack of appreciation of the full effects by the socialists currently running the country. But then why would they care, the taxes will just keep on going up....
William, Chelsea,
This was to be expected under a government of Philistines. Just surprising that it did not come sooner.
Bill, Suzhou, China
No great art anywhere else in Europe? All sounds like special pleading to me.
Colin , Shrewsbury,
i am sure we will survive. Most rich people just buy the art for investment anyway , and use it as a ticket to enter the uk. We never see it, we have enough as it is
kay, london,
Mark of Dubai is right about the 90 day limit but can he tell me how it is tracked. My passport is stamped on entry but there is no record of my exit. I have to keep my boarding cards and copies of my itineraries just in case. Could I ask for an exit stamp ?
Vis a vis the 30000 pound charge that surely is peanuts for the mega-rich that the director of the Tate is so concerned about. I couldn't afford 3000 pounds let alone 30000 so I have to be scrupulous .
Paul, Charlottesville, Virginia, USA
Of course this Government would want us to believe that it is better to hope that the super-rich may leave us the odd crumb of art, rather than making sure that the super-rich and the the super-large corporations pay as much in tax as ordinary people - why have Governments that wait for crumbs of cake rather than have taxation that buys enough bread with plenty of cash to spare to by the odd artwork.
hock, london, uk
Actually Dalya - regarding your last line - it is going to work out at 90 days in the tax year ( average over 4 years) to be liable for UK tax - that is more than other higher tax European countries - which have 183 days.
mark, Dubai,
That should be 90 days (average over 4 years) in last line I think.
mark, Dubai,
Who cares for those great philanthropists of the museum world?? They will only give it to a talentless tracy emin esque artists of this century. We should let the artist work for their money. My little sister inspires me so much more than any of this talentless work that I've seen recently in the Tate and the Baltic (Newcastle).
Steve, Newcastle, UK