The point I was making is that in establishing the CAA and passing the Air Navigation Order, Parliament takes account of wider interests not just interests of those flying aircraft in the UK. If aircraft are being permanently based and operated in the UK other than under the system established by Parliament this seems to thwart Parliament's intent in establishing the regulatory system. Obviously it is to the good of the aircraft owners to have N registered aircraft otherwise they would not do it. Whether it is or is not in the wider public interest is an entirely different matter and not one on which I have offered an opinion. However, it is an issue which could bring private flying into disrupte in the UK.
I think that your response to Westwind 1950 is a little disingenous. The FAR does prohibit non US citizens from owning N registered aircraft if they are operated outside the US for more than a certain number of day a year. It is to circumvent US legal requirements that people have resort to having an aircraft they have paid for owned and registered by a trust.