UK non-domiciled residents can exploit a legal vehicle to let them maintain traditional tax breaks and avoid paying the UK government’s new £30,000 annual levy, according to SCF Group, an advisory firm specialising in tax and trusts. The firm said non-doms can avoid the levy by creating Private Interest Foundations in either Liechtenstein or Panama. “Non-doms taking out properly structured PIFs can maintain many if not most of the benefits they previously enjoyed as long as they act before the next budget (in 2009), by which time the government may move to close this option,” SCF said in a statement. “Many of the non-domiciled residents affected by the new rules are not in the super-rich bracket,” said Barry Spencer-Higgins, group chief executive at the firm. HM Revenue & Customs, the UK's tax authority, said it was unable to immediately comment on the matter when it was contacted by WealthBriefing. SCF's statement follows the UK annual budget in March in which Alistair Darling, UK finance minister, confirmed the government would levy a £30,000 annual charge on non-doms if they wish to avoid paying UK tax on their worldwide income. The policy has prompted wealth managers to warn there will be an exodus of high net worth individuals from Britain, damaging the UK economy and financial services. SCF says a PIF is a civil law concept used in continental Europe in a similar way to trusts under English law. A PIF legally separates an individual or individuals from their assets and a PIF is a self-owning entity with no ultimate controller or owner. A PIF can help non-doms avoid the £30,000 charge because unlike a trust, a foundation is generally treated like a private limited company and hence outside the provisions of the anti-trust legislation applicable in most common law countries such as England, Ireland and the US, SCF says. In England and Wales, the private limited company status of PIF’s has been confirmed by the House of Lords in the Carl Zeiss Foundation v Rayner & Keeler case of 1967, it said. “One of the major problems with private interest foundations is that few tax planning firms in the UK have much experience in advising on how best to set-up such undertakings,” Mr Spencer-Higgins said. “It is vital that non-domiciled residents who wish to take advantage of PIFs take proper legal advice to ensure that their vehicles are watertight,” he added.