A climbdown ... or is it?

Yesterday, Alistair Darling was said to be considering a rethink of the Treasury's controversial non-dom tax proposals.  And last night, details of the rethink emerged.  According to the HMRC:

• "Those [non-doms] using the remittance basis [by which they only need to pay UK tax on their foreign income when they remit it to the UK] will not be required to make any additional disclosures about their income and gains arising abroad. So long as they declare their remittances to the UK and pay UK tax on them, they will not be required to disclose information on the source of the remittances"

• "there will be no retrospection in the treatment of trusts and the tax changes will not apply to gains accrued or realised prior to the changes coming into effect" 

• "money brought into the UK to pay the £30,000 charge will not itself be taxable"

• "it will continue to be possible to bring art works into the UK for public display without incurring a charge to tax"

The FT is calling these measures a "climbown" and a "retreat", and they're not alone in doing so.  However, the Treasury are characterising it as a "clarification" - claiming that their original proposals were misunderstood.  Whichever line is taken, it's clear that the above proposals are little more than tinkering around the edges.  The major proposal that a £30,000 charge will be levied on non-doms who have lived in the UK for seven years still remains in place.  

Darling should worry, then, that his embarrassing retreat/clarification will do little to placate the non-dom and business communities.  The capital exodus could still be on...