THE government is to crack down on foreigners living in Britain who side-step a new £30,000 tax on overseas earnings, as it admitted for the first time that thousands of wealthy residents could quit the UK to escape the charge.

The Treasury estimates that up to 3,000 non-domiciles will leave due to changes to their attractive tax regime next April.

Under current rules nondomiciles don’t have to pay tax on money made from assets held abroad. But from April, non-domiciles living in Britain for at least seven years will pay a flat-rate tax charge of £30,000 a year if they want to avoid paying tax on their overseas income and capital gains.

Tax advisers have been searching for ways to help wealthy clients escape the charge. But the government said last week it would prevent individuals using offshore trusts, relatives or businesses to hide their overseas earnings. It also plans to close a loophole that allows “nondoms” to shift money between bank accounts.

Leonie Kerswill at Price Waterhouse Coopers, an accountant, said: “People should be considering the potential impact of these changes to ensure that they are not caught out by the rules when they come into force.”

The number of nondomiciled workers in Britain is estimated to be 115,000, but the government said that even following the fresh clampdown many will still escape the tax charge. According to official figures, fewer than 20% of non-doms stay here for longer than seven years, after which the tax will be applied. Thousands of others with less than £1,000 in overseas income and gains are exempt.

The government expects only 4,000 people to pay the £30,000 fee. Many others will find it cheaper to have their worldwide income and gains taxed in Britain.