Taxing times

American bankers living over here in London have been so put off by the high living costs and tax increases - those earning over £150,000 a year will be taxed at 50 per cent from April next year and nondoms will have to pay a large annual fee to retain their tax friendly status - that they are selling up and heading home...

The number of US citizens living and working in London has already fallen by 126,000 - which is almost four per cent and this was before the new 50 per cent tax had even been mentioned.

Fast forward to this year and in the face of the global recession, more and more Americans are expected to head back to their homeland in the coming months.

Although house prices in prime London areas have fallen of late in line with the credit crunch, the cost of living remains very high and with banker's bonuses looking less likely as the economic issues continue, many high earners have been forced to give up the London life.

The Confederation of British Industry estimates the financial industry could lose about 45,000 jobs this year due to this exodus of Americans back to their homeland.

It seems size does matter - Americans are becoming less enamored with the ‘cosy' British homes, complaining that you get far less square footage for your money than you do in the states.

Public transport was also a factor, with Americans saying it was cramped and unreliable.

Alongside the new 50 per cent tax, the UK Government has also brought in a £30,000-a-year charge for 'nondoms' to keep their tax friendly status.

Nomdoms are British residents who have registered for "non-domiciled" tax status, meaning they call Britain their home and so don't have to pay tax on their earnings outside the country.

This new charge will be levied on those foreigners who have lived in the country and claimed nondom status for more than seven of the past 10 years.

There are around 115,000 non-doms in Britain, and that about a fifth of them have lived in the country over seven years. It is expected that some 3,000 will leave Britain. 

Picture by Daveybot