Wealthy “non-domiciled” foreigners who have been in Britain for seven years face an annual £30,000 charge for staying outside the tax system.

Otherwise they would have to pay income tax on their offshore assets of as much as 40 per cent.

The Chancellor said that his proposals were aimed at “preventing people claiming that they are out of the country when they are actually here, from disguising income as capital and from claiming in effect two allowances”.

They are designed to force wealthy businessman such as Roman Abramovich, the owner of Chelsea Football Club, and big players in the private equity business to pay more tax.

Tax experts criticised the “non-dom” plan as confusing and said that it could undermine the strength of the City of London as one of the world’s top financial centres. They suggested that the Chancellor’s proposals, which include modifications to the so-called “90day” residency rule for taxpayers, could prompt wealthy businessman to leave Britain in droves for lighter-touch tax regimes.

Alex Henderson, tax partner at PricewaterhouseCoopers, said: “He’s giving non-domiciled taxpayers an invidious choice between a £30,000 flat-rate charge, which they must pay year on year, or calculating worldwide income and gains.

“On top of that, by amending some highly technical definitions, he’s tightening what will be counted even if you pay the £30,000. As well as the tax, internationally mobile individuals are going to have an increased compliance burden.

“This is much more than one would have expected for a consultation. We need to see the detail but people will be looking very carefully at their financial and personal affairs and trying to work out whether the extra tax is worth it.”

A spokesman for the consultants KPMG said: “Far from simplifying things, these new proposals appear very complex and will require a number of computations to see which basis of taxation an individual wants to claim under.”

Under the proposals, put out to consultation yesterday, any non-domiciled foreigner who wants to claim their status will not be entitled to a personal tax allowance. The Treasury said that this would affect about 113,000 people.

The charge would apply to individuals resident in Britain for seven years. The Chancellor also said that he wanted further to tighten nondom rules for those resident here for more than ten years.

Non-doms, he added, contributed £4 billion in taxes and any reform of the current system had to be “fair, workable and affordable”. But he attacked Opposition proposals aimed at raising £3.5 billion by imposing an annual non-dom levy of £25,000 as unworkable. He said that the Tory plans would hit just 15,000 people and raise only £650 million – a shortfall of almost £2 billion.

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