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You have to love politicians

https://www.bbc.co.uk/news/uk-politics-61034496

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"Every single penny she earns in the UK she pays UK taxes on... and every penny that she earns internationally, for example in India, she would pay the full taxes on that," he said.

https://www.bbc.co.uk/news/uk-politics-61034496

So if the full worldwide tax paid on that Indian dividend in her hands (in an offshore bank account of course) is zero (e.g. no local WHT) with a £30k RBC, that's alright then?

https://www.gov.uk/guidance/remittance-basis-changes

You have to admire their sneaky wording. Apparently they both have Green Cards (which of course helps her assertion that she has not acquired a UK domicile of choice) and so should only be subject to US taxes on US source income (and not large Indian dividends). See:

"9. Tie-Breaker Rule to Apply Treaty Benefits

U.S. green card holders residing in the UK may elect to apply what is known as the tie-breaker rule of the US/UK Tax Treaty and be deemed a resident only of the State (i.e. country) with which their personal and economic relations are closer (UK). 

Under such election, the individual would file form 1040NR and report only income derived from U.S. sourced. The requirement to provide full disclosure of foreign bank accounts remains and tax on income from U.S. sources will be higher than tax on the same income when applied to U.S. residents filing form 1040."

https://www.taxesforexpats.com/country_guides/uk/us-tax-preparation-in-u...

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By williams lester accountants
08th Apr 2022 12:32

Don't see the problem, this is legal, so nothing really to concern us here. if this was our client, would we be complaining or congratulating ourselves on our tax planning?

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Replying to williams lester accountants:
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By Justin Bryant
08th Apr 2022 12:50

I agree*. My comment was re the sneaky wording only, where "full" can mean "zero" (or at least not much). That's all.

*my above comment is the first I've seen fully explaining their tax planning (assuming the Green Card thing is correct). (It takes one to know one and all that.)

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By Tax Dragon
08th Apr 2022 13:16

Maybe it's the omission of the word "due" that's the error. There has to be some qualification to the word "tax" if she's not paying any. But if her liability to tax is £Nil, and if she then pays £Nil, she is paying the full tax due. (My obvious point is that saying "she pays tax" without any qualification could, in that scenario, be seen as untrue. And politicians don't tell untruths, as you well know.)

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By Justin Bryant
08th Apr 2022 13:23

I'm happy for my above (original) analysis of their non-dom tax planning to be proved wrong, but it looks 100% right to me.

Perhaps one of the papers will pick it up (The Times once quoted a comment of mine here re tax avoidance).

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By Tax Dragon
08th Apr 2022 13:32

My comment was only re the lack of sneak I perceive in the wording, as saying "taxes" without the preliminary "full" might be incorrect. (And that I personally might have added "due" after "taxes".) That's all.

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Replying to williams lester accountants:
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By justsotax
08th Apr 2022 12:57

I suppose it depends if the chancellor is your client, the one who decided that 'we' (well not all of us) have to contribute extra to the NHS......

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By Justin Bryant
08th Apr 2022 13:01

Yes; I did not bother mentioning that part of it (as Labour etc. have done that already).

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By Tax Dragon
08th Apr 2022 13:19

Does the chancellor's wife play golf? Or was it that he does and she doesn't? I forget the details... but there was a story or thread about something like this in here once, if I recall.

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By I'msorryIhaven'taclue
08th Apr 2022 13:38

I heard she has a tax-free wedge ;-)

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Replying to I'msorryIhaven'taclue:
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By Tax Dragon
08th Apr 2022 13:45

But it's stuck in a tax-bunker overseas. No use in the UK. Still, she pays a storage fee for it. Here in the UK. And that's not even where the bunker is.

But that wasn't my point. Which is: do you think it is right that, if you marry a successful politician (or a person who later becomes a successful politician), then your tax affairs are fair game for the national press?

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By I'msorryIhaven'taclue
08th Apr 2022 14:01

His wife holds a £6m stake in Infosys, which has Russian / Putin ties. So far as I'm aware the company has yet to suspend its Russian operations.

For which reasons I believe the press are barking up the wrong tree over taxes. Ever since that nitwit Cameron spoke out about tax avoidance as though it was a dirty word, neither public nor press seem to be able to distinguish it from tax avoidance. It's all rabble-rousing!

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Replying to I'msorryIhaven'taclue:
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By Tax Dragon
08th Apr 2022 14:08

Agreed comment on that is fair game, just as accountants and similar might be asked to declare interests that they and their families have in audit clients or what have you.

What about tax?

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Replying to Tax Dragon:
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By Bobbo
08th Apr 2022 14:07

Tax Dragon wrote:

But that wasn't my point. Which is: do you think it is right that, if you marry a successful politician (or a person who later becomes a successful politician), then your tax affairs are fair game for the national press?

Absolutely fair game.

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By Tax Dragon
08th Apr 2022 14:17

Why? You think she should personally pay off the national debt or something just because of who she married?

(I might feel different if she was the chancellor and Rishi the filthy-rich spouse... I'm not sure... can't project my imagination to that scenario... have we ever had a female chancellor?!... anyway, normally when it's she that's the successful politician the public interest issue in he (the spouse) seems to be sex/[***] not money. But actually... even then I don't see that the public has a right to know. Not really.)

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By I'msorryIhaven'taclue
08th Apr 2022 14:50

We Brits like to place people on a pedestal and then knock them off; don't we just!

Personally I feel safer having a Chancellor who has some idea of how to arrange his affairs so as to minimise his tax. I was never happy with the likes of John Major and his three o-levels running the country's finances. Might as well put Rodders in charge of the Exchequer!

Even better that Rishi's wife is au fait with taxation matters: means he can go ask her whenever he's stuck. What's the betting Mrs Sunak's running the country's finances: eat out to help out sounds like it had a woman's touch. Dishing out £150 of council-tax rebate to terraced-hovel dwellers doesn't sound like something we blokes might think of unaided. And I bet his next-door neighbour Boris wishes he had a loaded missus to pay off his overdraft and tell him how to run the country, instead of messing around painting and decorating and worry-gutsing about badgers and arguing with that nice Mr Cummings... just saying ;-)

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By justsotax
08th Apr 2022 17:08

it is mildy amusing to see a government so intent on keeping jonny foreigner out and flying the St George Flag, have a chancellor whose wife has intention it seems is to return to India.....and it looks like the Chancellor wants to settle in the US? on the irony....if only the little people had such choices.....

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By Bobbo
08th Apr 2022 16:22

No. I simply think that somebody that is resident in the UK they should be paying UK tax on worldwide income and gains (subject to the usual foreign tax credit reliefs etc).

In my opinion, non-domiciled rules should be abolished immediately. If you're UK tax resident then you pay tax on it all. None of this claiming you aren't remitting it so it won't be taxed.

So it's who they married that makes it fair game, rather it's thatthe tax affairs of anybody claiming non-domiciled status are fair game. Akshata's spouse being the person in charge of tax rules just brings them into the public eye.

Non-domiciled status is based on the idea that a person's permanent home is elsewhere. I would suggest having been married for over a decade to someone born and raised in the UK that is currently a UK politician strongly indicates your permanent home is in the UK, and that Akshata's non-domiciled status is a sham.

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By Tax Dragon
08th Apr 2022 16:49

"Currently." You've nailed it in one word. Domicile is not about - or at least is only partly about - the current. But anyway, that's why we now have deemed domicile rules for all taxes, so that long-term residents (whatever their actual domicile) are taxed as if they had become domiciled.

The UK tax rules are absolutely fair game for discussion*. Akshata's personal tax, her marriage and everything else not so. IMHO.

*During which discussion you would be more than welcome to suggest that 15 years is too long.

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By Catherine Newman
08th Apr 2022 17:05

You are bang on Bobbo. I agree wholeheartedly.

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By More unearned luck
08th Apr 2022 17:28

"...do you think it is right that, if you marry a successful politician (or a person who later becomes a successful politician), then your tax affairs are fair game for the national press?"

Her income per se then, no. But what is in the public interest, now that her claim for the remittance basis is public knowledge, is the apparent mismatch between their commitment to the UK. He, is in high office and apparently has ambitions to become PM, she intends to return to India.

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Replying to More unearned luck:
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By Tax Dragon
08th Apr 2022 17:34

You think the public has a right to nosey-in on their private marital affairs?

I fundamentally disagree. Marriage is hard enough as it is. Bringing up children doubly so.

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By I'msorryIhaven'taclue
09th Apr 2022 09:16

Tax Dragon wrote:

I fundamentally disagree. Marriage is hard enough as it is. Bringing up children doubly so.

Well speaking for myself, bringing up children was hard enough; marriage doubly so.

According to Express Co Rishi's net worth is $278,499,800 (his wife's worth a good deal more) and what I want to know is how he managed to save up all that on a salary of £200k a year!

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By DJKL
09th Apr 2022 11:28

And we know he is a driver-he drives borrowed cars.

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By Justin Bryant
08th Apr 2022 15:23

Someone (HMRC?) simply needs to ask RS if he and his family intend to emigrate from the UK in the long term to live out the rest of their lives abroad. If he says "no" then this non-dom planning quickly unravels.

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By Justin Bryant
08th Apr 2022 16:43

These journalists are all barking up the wrong tree re IHT. That's pretty irrelevant as she's married and anyway the DTA only disapplies deemed UK domicile (re offshore assets assuming no UK will) and she's years away from that (and she can avoid IHT with an EPT before then anyway provided she's not acquired a UK domicile of choice - see below).

https://www.bbc.co.uk/news/business-61041926

What's relevant is her current (non-deemed) domicile status. They should read Aweb for the incisive & relevant commentary.

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ALISK
By atleastisoundknowledgable...
08th Apr 2022 17:13

Non-dim status for remittance basis all seems just good tax planning. It’s the IHT ‘loophole’ in the Indian DTT that’s the issue in my mind. Whether he’d actually manage to get a redraft through our and their parliaments aside, surely as chancellor, Rishi has an obligation to try and get it in line with other DTTs. Whether he’s not trying because it’ll cost his wife’s estate £100m’s m, or he knows it wouldn’t get through anyway so what’s the point, or just because it’d be bad politically, surely he has an obligation to try.*

*edit : in a non-covid world. I s’pose he can have a little leeway with having had other more pressing things in the last 2 years (covid, not MTD), but now that’s essentially done, this would be a good way of plugging some of the gap.

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Replying to atleastisoundknowledgable...:
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By Tax Dragon
08th Apr 2022 17:44

atleastisoundknowledgable... wrote:

Non-dim status...

I'm claiming dim status.

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Replying to Tax Dragon:
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By Mr_awol
11th Apr 2022 11:59

Tax Dragon wrote:

atleastisoundknowledgable... wrote:

Non-dim status...

I'm claiming dim status.

Ive been deemed dim before now (and probably will be again)

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By Paul Crowley
08th Apr 2022 17:45

This is the reason why he will never make PM
Tax avoidance by my wife is just so much more important than my career

Tax the oiks, not my wife

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By Tax Dragon
08th Apr 2022 19:19

It's almost as if this whole story was started by a rival would-be Tory PM...

But (sorry to sound like Justin) your comment joins in with the whole lack of appreciation of UK tax rules. Successive governments has wrestled with reform of the taxation of non-doms. And the solution is simple and obvious (and has been mentioned above). But no government of any hue has had the guts to do it. Or they've always been bought off. Or whatever. It's not right but it's what's happened. And if this (and moreso the oligarch thing) leads to reform, then that's a good outcome.

But, under current rules, if you had a rich non-dom client with low remittances, would you advise them to pay the 5-figure tax sum that the law allows by making a simple claim, or would you advise them not make that claim and pay a 7 (or 8) figure sum in tax*? This individual should not be forced to pay tax just because she married the then-future Chancellor. And the Chancellor should not be forced to quit because he married a non-dom.

* We don't even know that's true in this case, because we don't know what relief would be due under tax treaties etc. But presumably her liability would be more by not making the claim.

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By DJKL
09th Apr 2022 11:31

If I was looking for a smoking gun I would look to No 10, if no serious rivals left then nobody can depose.

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By Justin Bryant
08th Apr 2022 18:00

I see these journalists are now barking up the right tree re the Green Card issue (IHT is more or less a total red herring per my above comment). They now just need to join the dots as I did above re the impact of that on his wife's non-dom status:

https://www.bbc.co.uk/news/uk-politics-61044847

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By Justin Bryant
09th Apr 2022 11:18

Looks like my analysis was spot on. Her non-dom status was simply not sustainable on the facts (given RS recently renounced his GC which was just a fig leaf argument anyway to support her non-dom status i.e. her not acquiring a UK domicile of choice despite her establishing a very much UK-based family etc.). That's why late yesterday she threw in the towel as she knew the game was up.

https://www.bbc.co.uk/news/uk-politics-61045825

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By Tax Dragon
09th Apr 2022 23:01

Maybe it's just me (it's not), but, Justin, you have come across as excessively chauvinistic in this (and the related) thread.

Her domicile based on his GC status, his intentions ("someone should ask RS..."... not her, him), his fig leaf etc.

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By I'msorryIhaven'taclue
10th Apr 2022 09:26

Chauvinistic! Your hormones playing you up?
Be a sweetie and apologise to Justin;
there's a good girl ;-)

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Replying to I'msorryIhaven'taclue:
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By Justin Bryant
10th Apr 2022 11:38

I'm not that bad (if I'm bad at all). Just watch any random episode of Star Trek The Original Series for proper male chauvinism and sexism (which is a bit strange as it was very liberal and forward thinking in other ways).

Anyway, back to planet tax and I note these journalists are still failing to join the dots re RS's GC (or lack thereof) and the potential UK domicile of choice issue.

https://www.dailymail.co.uk/news/article-10703903/Rishi-Sunak-moves-fami...

I liked this bit of further attempted dissembling:

"His spokesman said he was being doubly taxed in full on his £151,000 Cabinet salary in both countries.

However, last night tax experts said that more sophisticated off-setting arrangements were likely to be in place."

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By I'msorryIhaven'taclue
10th Apr 2022 15:50

I've always thought Mr Spock has a get-me male-superiority misogynistic air to him. And don't think I haven't noticed the way Captain Kirk never takes a turn answering the blower but leaves it all to Lieutenant Uhura to pick up!

So Rishi's moved his sticks out of Downing Street... I reckon he'll throw in the towel Monday.

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By Justin Bryant
11th Apr 2022 12:46

I think Spock was the exception if anything, as point 2 below re an episode last week shows:

"This is why I think Elaan of Troyius is a sexist episode:

(I'm qualifying this by saying that it was made in the 60s and I accept that there were different standards then)

1. They were forcing a woman to marry someone she didn't want to.

2. Kirk's remark "Mister Spock, the women on your planet are logical. That's the only planet in this galaxy that can make that claim."

3. McCoys remark about Elas women " Now the women, they're supposed to be something very special. They're supposed to have a kind of subtle, mystical power that drives men wild."

4. Kirk threatening to spank Elaan - infantilises her.

5. The overall message of the episode that Kirk managed to tame the unruly woman and teach her how to be good for her Troyian husband.

6. Although well intended putting Elaan in Uhura's girly room instead of some regular guest Ambassador's quarters is condescending.

I'm ignoring the slow pan of Elaan's outfit. I'm not against keeping the sexy in Star Trek.

Now the episode makes it seem OK to treat a planetary leader (the Dohlman) with condescension if they are unpleasant and are a woman.

I doubt Kirk would threaten to spank a male Dohlman."

https://www.trekbbs.com/threads/elaan-of-troyius-mess-of-an-episode.2525...

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By Justin Bryant
10th Apr 2022 11:34

But they are married and if you understand how domicile of choice works his GC status is potentially massively relevant (it would potentially give her a complete answer to retaining her domicile of origin despite being married to a Brit and living in the UK like any other typical long term UK family - the thing about her going back to India at some point to care for her parents would not really wash as an argument in the face of that, as it implies she would stay in India from that point onwards even after her parents died and only really works if RS planned on joining her there on that same basis).

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By Tax Dragon
10th Apr 2022 20:24

It's not difficult to imagine that they'll base themselves in the UK while he has political aspirations here (and they bring up the children), and plan to move together to India once those reasons to stay here are spent. It's none of our business - but giving up the GC suggests it might be so. Whereas I'm not quite sure what dots you're trying to join with the GC point... patently neither of them currently has a US domicile.

But...

Justin Bryant wrote:

...and only really works if RS planned on joining her there on that same basis).

You're doing it again. Her domicile is her choice. If Rishi chooses to join her in India, that's his choice.

I'm glad I didn't marry an accountant. You all seem to be stuck in 1973.

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By Justin Bryant
11th Apr 2022 10:42

You did not read/understated my comment. As they are currently married and living together their GCs are only together potentially a complete defence. All your chauvinism complaints are misplaced. (If she was single her GC alone would be fine an an excuse.)

As for their alternative potential excuse, for the same reason RS would have to intend to join her to live out the rest of his days in India. There is no evidence of that to my knowledge (it would presumably be politically damaging for him to confirm that even if it was true.)

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By anon57
11th Apr 2022 10:55

My understanding (but I could be wrong) is that they have given back their GCs. It was always going to be dodgy trying to keep them while not actually living in the US (although people do get away with it, for years).

But I also read online that the Infosys stock is in an offshore trust and Rishi is one of the beneficiaries. So even without any distribution of funds, Rishi has a direct interest in the amount of tax paid on the dividends. Whatever you think about his wife's affairs, *his* affairs surely are relevant ?

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By Tax Dragon
11th Apr 2022 11:46

His tax is not affected by his wife's domicile.

Maybe I really am losing it - I'm not following anyone's logic on this thread.

Oh, but talking of which...

Justin Bryant wrote:

(If she was single her GC alone would be fine an an excuse.)

Words like "excuse" don't help much here. But I think what you are saying is that she can't have a domicile of choice in the UK if she intends to leave the UK. To the extent that a GC is evidence of an intent to leave the UK, it is evidence that she has not acquired a DoC here. That probably makes more sense than I gave you credit for.

But if the intention is to retire to India, a GC is irrelevant. So you could equally say (as I did above) that giving up the GC is evidence of such an intention.

So I think you are overplaying the GC thing.

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By anon57
11th Apr 2022 12:01

Tax Dragon wrote:

His tax is not affected by his wife's domicile.

His tax isn't affected but as a beneficiary of the trust he has beneficial ownership over the (relatively untaxed) dividends.

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By Tax Dragon
11th Apr 2022 13:30

If he has beneficial ownership over the (relatively untaxed) dividends then he pays UK tax on them, being resident and domiciled in the UK.

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By anon57
11th Apr 2022 13:38

Tax Dragon wrote:

If he has beneficial ownership over the (relatively untaxed) dividends then he pays UK tax on them, being resident and domiciled in the UK.

Not quite. It's more likely that the receipt of dividends would be assessed on the settlor of the trust, if at all. (But we are speculating as we don't know how it was set up.)

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By Justin Bryant
11th Apr 2022 12:50

I'm not overplaying anything. I have however given up trying to explain it to you!

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By Tax Dragon
11th Apr 2022 13:22

Shames, I thought we were getting along famously.

Justin Bryant wrote:

"9. Tie-Breaker Rule to Apply Treaty Benefits

U.S. green card holders residing in the UK may elect to apply what is known as the tie-breaker rule of the US/UK Tax Treaty and be deemed a resident only of the State (i.e. country) with which their personal and economic relations are closer (UK).

Whereas a non-US someone living in the UK who doesn't hold a GC is taxed... how? (And anyway... isn't that about US tax?)

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By More unearned luck
11th Apr 2022 11:39

"It's not difficult to imagine that they'll base themselves in the UK while he has political aspirations here (and they bring up the children), and plan to move together to India once those reasons to stay here are spent. It's none of our business..."

If you are right about his intentions then shouldn't that be of interest to voters? A lack of commitment to the UK, seems very relevant. Although I understand that a former chancellor of the exchequer is now living in France.

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Replying to More unearned luck:
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By Tax Dragon
11th Apr 2022 11:53

More unearned luck wrote:

If you are right about his intentions then shouldn't that be of interest to voters?

Forgive my naivety, but I'd suggest that the policies he would adopt while in power should be of infinitely greater interest.

Just as you might care whether your new signing scores goals for your team now - you don't care that s/he used to score goals for another team (or may score goals for another team in the future when you sell him/her off at a nice profit).

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