An individual who is resident nondomicile may have successfully persuaded the taxman that his permanent home is definitely not Britain. But this does not prevent the beneficiary of this regime seeking out a lavish London base to house his large family. Five or six children are the norm, necessitating the purchase of a many-bedroomed mansion, or lateral flat with a seven or eight-figure price tag.

The trophy Harrods-handy addresses for the resident nondomicile (“the nondoms”) crowd are: white stucco-fronted Eaton Square and red-brick Cadogan Square in Belgravia, equally handsome Ennismore Gardens in Knightsbridge, and also Onslow Square and Gilston Road in the Little Boltons in South Kensington.

A mews-type property is currently available in Cadogan Square for £3.9 million. Last month, an 11,000 sq ft house was on the market for £14 million.

The acquisition of a London home will be organised to minimise tax. Mr NonDom buys shares in the offshore company that holds the property. In this way, he pays stamp duty at the lower rate of 0.5 per cent, the rate payable on share purchases, rather than at 4 per cent, the rate on properties of more than £500,000. This reduces the tax bill on a £10 million home from £400,000 to £50,000.

The London property market

Ripple effect from Belgravia to the suburbs

Homebuyers of more modest means may be only slightly mollified to learn that Mr NonDom must pay council tax

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Homebuyers of more modest means may be only slightly mollified to learn that Mr NonDom must pay council tax, one of the two British taxes for which he is liable: the other is income tax on his income in Britain.

To date, the current focus on the nondom concessions is causing little concern in this class. One adviser commented: “They’re too busy making money to be bothered. They feel that if Gordon Brown closed the loophole now, this would expose the fact that he had allowed it to remain open for so long.”

But the new scrutiny on the tax breaks enjoyed by the very few is provoking a different reaction among the middle-classes. The spending power of the international rich has driven up prices not only in the sought-after central areas of the capital, but also in less exclusive parts through a ripple effect.

Take the case of a City fund manager – who, though extremely generously renumerated, is still a pauper by resident nondomicile standards. He used to aspire to Chelsea, but is now compelled to look in Fulham and Wandsworth. Finding himself priced out, he must set his sights lower to suburbs such as Earlsfield, so putting homes in such up-and-coming districts out of the reach of the buyer in less easy circumstances. Should Mr Brown mind the wealth gap? Yes.

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