| The UK 'non doms' move |
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| This Financejobs.ie finance careers symposium, examines the impact that changes to the UK's taxation of non domiciled residents are having on the City, and whether Ireland will gain. |
Do you think recent tax developments in the UK, i.e. the non doms tax, will see an influx of UK based 'non doms' to Ireland's finance industry?
Andrew Caffrey, financial director, HRM Recruitment: The changes in the 2008 Budget materially affect those non-UK domiciled individuals who have been resident in the UK for at least seven of the nine previous years. Given the length of their residency in the UK, it is questionable how many of these individuals would change their country of residence. For other 'non doms' and given the number of international finance and insurance firms based here in addition to the geographical proximity and shared language between the two countries, Ireland does offer an attractive alternative option.
David Hannon, manager at Deloitte Executive Search and Selection: No, while the current wisdom suggests Ireland will be more attractive, I don't see a huge influx. It is estimated that 3,000 people will leave the UK, and possibly a small percentage of them will look to Ireland, but I would suggest there are other factors to consider. Opportunities made available in our financial services industry for one, and the lifestyle afforded in Ireland is another. Like all new tax regimes it will take a while for people to assess how it will affect them. The 'super rich' who enjoy the lifestyle that London offers will pay the new annual fee of €30,000 and accept it as a condition of that lifestyle. The mid-level earners may want to move out of the UK but may find the high-end career opportunities aren't as plentiful in the financial services sector in Ireland. Particularly in the short term.
Nicola Kavanagh, managing consultant banking and finance, Hudson: In this current turbulent global financial market, the Irish Finance Industry can expect to see an increase in traffic of 'non doms' for a variety of reasons including the recent tax developments in the UK but not solely as result of them.
How can firms improve their remuneration packages to entice internationally mobile finance professionals?
Nicola Kavanagh: Global organisations can design a package that will appeal and make it more tax efficient. For example an overall remuneration package could be drawn up with a greater variety of, and emphasis on, benefits rather than the overall value of the package being reflected in the basic salary alone. Relocation and accommodation costs could be included here as both are tax neutral.
David Hannon: One suggestion is to look at relocation packages for mid-level earners. A number of firms tend to only supply relocation for senior management/executive level employees. A strong relocation package often entices workers to move jobs faster and stay longer. High skilled employees by their nature are mobile and the competition to attract them is increasingly getting harder. An attractive relocation package creates a greater incentive to move.
Andrew Caffrey: International firms operating in Ireland need first to ensure that relevant job opportunities exist in this country for these typically highly paid professionals. Attractive relocation packages, remote working options and educational support should all be considered as should recruitment assistance for spouses and/or partners of such professionals.
Are there any obstacles in the Irish system, e.g. remittance basis of tax, to attracting 'non dom' financial professionals?
Andrew Caffrey: The current system in Ireland offers a number of advantages over other European countries in areas such as inheritance and tax residency. This favourable tax regime should be maintained.
David Hannon: The move from a domicile to a residence based system of capital acquisitions tax (CAT) some years ago was not a wise piece of legislation when considering attracting the 'non dom' who contributes to the development of the Irish economy. 'Non doms' are fully exposed to CAT on gifts and inheritances given and received, of assets worldwide, after they have been resident in Ireland for five consecutive years. I would suggest that this is another obstacle and can have a negative impact on the decision making of financial professionals when considering Ireland as a location for their next post. |
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| Article appeared in the June 2008 issue.
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