July 18, 2024

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Wealthy foreigners step up plans to leave UK as taxes increase

2 min read

Increasing numbers of wealthy foreigners say they are leaving the UK in response to the abolition of the “non-dom” regime that allowed them to avoid paying tax on overseas income. 

The change — backed by both the Conservative and Labour parties — has contributed to a relative decline in the UK’s attractiveness, according to over a dozen interviews with wealthy foreigners and their advisers. Other deterrents cited include Brexit, fiscal and political instability, and concerns around security. 

“Brexit happened and the Conservatives promised to make the UK like Singapore and instead they turned this place into Belarus,” said a billionaire businessman who has lived in London for 15 years and is now moving his tax residency to Abu Dhabi. “Security is now a major issue and another contributing factor to the tax reasons for why people are wanting to leave.”

In March chancellor Jeremy Hunt stole one of the opposition Labour party’s flagship fiscal policies when he announced the abolition of the non-dom regime. 

Labour shadow chancellor Rachel Reeves followed with proposals to toughen the planned crackdown, notably reversing a Tory decision to permit non-doms who will lose benefits from next April to shield foreign assets held in an offshore trust from inheritance tax permanently. 

Polls have put Sir Keir Starmer’s Labour party on track for victory in the general election on July 4. 

“The UK’s inheritance tax of 40 per cent on your global assets is a real problem,” said a European non-dom businessman in his 50s, who is moving his family from London to Switzerland after more than a decade in the UK. “It’s the overall instability that has been the nail in the coffin for me. If there was a more balanced, less punitive inheritance tax I might have considered staying.” 

While Starmer has sought to position Labour as the “party of wealth creation”, the non-dom changes mark one of several potential tax increases under a Labour…

2024-06-21 16:00:41

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