UK to start taxing US investments after 7 years

Probably not answerable in a quick post.  Does anyone else think it unfair of the UK to tax US investments after 7 years of residence.  After 7 years you can't claim the remittance basis and will be taxed on worldwide income unless you fork over £30,000.  I can see if I was some banker here making millions and sending it overseas.  But what about people who say earned and saved some money while living in the US most of their lives, and then don't remit any of it to the UK.  I can't see any moral basis for the UK taxing income neither earned in the UK nor earning interested in a UK institution.

UK is actually quite good wrt tax on foreign assets as it actually has a remittance basis. Many countries will tax just based on residency and then there's the US that will tax a US citizen on worldwide income no matter where they live or invest.

There is a UK/US tax treaty in place that will prevent "double taxation", but your tax prep will become more complex once you have to file SA100 and SA106 as well as your 1040 etc. The question then becomes what sort of US investments do you have and will they be punitively taxed by the UK?

Only unbelievably rich people can afford the remittance basis after 7 years.  So that doesn't help us normal people.  Instead we are forced to pay higher tax rates on money that has nothing to do with the UK.

And as for the UK tax forms...  Have you priced UK based accountants to do these kind of returns versus their American counterparts?  An absolute scam.

So what do you think of the US taxing your UK income and investments?

I think staying 7 years in the UK shows that you are pretty permanently resident there and hence you should be taxed as someone who is resident and ordinarily resident. Your residency makes your US assets very much the concern of HMRC. The logic that investments in another country should not be taxed in your country of residence is not one that has ever been generally applied. As I said the UK is actually quite liberal when it comes to taxing foreign assets as in certain circumstances non-doms can choose the remittance basis over the arising basis, when many countries would automatically tax you on an arising basis.

It's in the nature of expatriate life that for many future plans are pretty fluid and residence of 7 years (or more) doesn't particularly indicate you're there permanently. This is precisely where the distinction between residency and domicile was useful. Domicile treated the intent (or aspiration) of permanance; residency was more contingent - where you happened to be.
How this should be taxed is of course a different question.

It's in the nature of expatriate life that for many future plans are pretty fluid and residence of 7 years (or more) doesn't particularly indicate you're there permanently. This is precisely where the distinction between residency and domicile was useful. Domicile treated the intent (or aspiration) of permanance; residency was more contingent - where you happened to be.
How this should be taxed is of course a different question.

In the UK, and most other countries, you don't have to be domiciled to be taxed on your worldwide income. HMRC will tax you on an arising basis if you are ordinarily resident in the UK. This basically means that you intend to stay in the UK for more than 3 years or you have made the UK your permanent home. As I said the UK is very liberal in how it taxes foreign investments because as a non-dom you can work things so you can live in the UK for 7 years and not get taxed on an arising basis. Compare that to France where there is no concept of "ordinarily resident", you just have to be  a resident for France to tax your worldwide income on an arising basis. Worst of all is the US that taxes it's citizens on an arising basis without regard to your residency.

So you should actually be thanking the UK for giving you a 7 year tax holiday.

Actually the UK has done quite well on me being here.  For 7 years I've lost the standard exemption so have paid quite heavy taxes on my salary.

I do agree the US is pretty unfair.  I'm particularly worried about my kids who are now dual citizens.  I feel like I've doomed them to a life of filling out US tax forms even if they never owe any tax or set foot in the US ever.

I'm not saying some countries aren't worse, I just don't see the logic of some country taxing income which stays in another country and may never ever leave there.  I'm happy to pay my US taxes on that.  I think there is a good George Harrison song that sums up the situation quite nicely!

Actually the UK has done quite well on me being here.  For 7 years I've lost the standard exemption so have paid quite heavy taxes on my salary.

Well that's that's the consequence of choosing the remittance basis, at least the UK gives you a choice, other countries do not and you are forced into the arising basis.
If you think about it you should really be complaining more about the IRS that has been taxing your UK income and gains from day one.

Well one consequence of living in a high tax country is that I've never really had to pay US tax on UK salary/investments.  The foreign tax credit takes care of that.  So the IRS hasn't benefited at all.