Softer approach adopted for non-doms

Further concessions announced

The chancellor Mr Darling has announced further concessions relating to his proposals for a tax clampdown on high-earning "non-domiciled" residents in Britain. These included the approach to offshore trusts and the structuring of the £30,000 charge to qualify for double taxation relief, avoiding paying tax twice on the same income or gains.

The chancellor is however still pressing ahead with what he described as a "reasonable" annual levy of £30,000 on non-doms who have been living in Britain for at least seven years. But the payment has been shifted from a stand-alone charge to a tax payment related to specific overseas earnings or capital gains. For Americans, in particular, the change makes it more likely that the payment can be offset against tax paid in the non-doms' own country.

The chancellor has offered a guarantee that there would be no further moves on non-doms in this parliament or the next, although there has been disappointment that the chancellor did not responded to pleas for a one-year delay in the clampdown.

The government also made it clear that it would not impose the levy on children under 18. The exclusion of children from the charge was also a demand of The Indus Entrepreneurs (TiE), which represents more than 1,000 entrepreneurs and investors from India and Pakistan.

In another concession announced, non-doms will not have to pay tax on capital gains made on UK assets held in offshore trusts, as long as the cash is not brought into Britain.

The government is seeking to secure a deal with the US to allow American citizens to offset the £30,000 charge against their US tax bill.

The chancellor has also climbed down on the method of counting the number of days an individual spends in the UK for residency and tax purposes. The government had planned to include the days a person arrives and departs from the country. Now though, only days where the individual is present in Britain at midnight will be counted.

The chancellor said the government welcomed the "contribution made by people born outside the UK who choose to come and work here. But for those non-domiciled individuals or families who have chosen to make Britain their home, I believe that it is right and fair that they should, after seven years, pay a reasonable charge to maintain the right to be taxed differently from other UK residents."

The government is going ahead with plans to close the loophole that allows non-doms to bring assets bought with foreign earnings into Britain without paying tax on them. From April, goods worth more than £1,000 kept in the UK for more than nine months are liable to tax. There is an exemption for works of art brought into Britain for public display, which will calm galleries' fears.

Levels and bases of, and reliefs from, taxation are subject to change.