Latest news with #wealthExodus
The Independent
3 days ago
- Business
- The Independent
Reeves considers U-turn on non-dom crackdown to halt exodus of wealthy
Rachel Reeves is considering climbing down on her non-dom crackdown to stem the flow of ultra-rich taxpayers leaving the UK. The chancellor is deciding whether to U-turn on the decision to tax non-domiciled individuals inheritance tax based on their global assets. The changes, which formed a key part of Labour's general election campaign, have raised concerns about an exodus of the wealthy as they flee in search of lower taxes. And a senior City figure told the Financial Times 'there will most likely be some tweaks to inheritance tax to stop the non-dom exodus'. Billionaire steel tycoon Lakshmi Mittal is among those said to be considering leaving Britain as a result of the chancellor's changes. A spokesman for the Treasury said: 'The government will continue to work with stakeholders to ensure the new regime is internationally competitive and continues to focus on attracting the best talent and investment to the UK.' The non-dom tax loophole, which lets foreign nationals living in Britain avoid paying tax on overseas earnings, was thrust into the spotlight when The Independent first revealed that Akshata Murty, Rishi Sunak's wife, had used it to save potentially millions of pounds. Ms Murty, whose family business is estimated to be worth around £60bn, later said she would no longer claim the status on her worldwide earnings. At the time, she said she did not want her tax status to be a 'distraction for my husband or to affect my family'. Since Labour came to power in July, the UK has lost a millionaire every 45 minutes, with the exodus driven by Labour's tax grabs and a lack of business confidence. Britain lost a net 10,800 millionaires last year, a 157 per cent increase on 2023, including 78 centi-millionaires (worth at least £100 million) and 12 billionaires. They left for other countries mainly in Europe, such as Italy and Switzerland, as well as the United Arab Emirates. Tax planners have repeatedly warned of an exodus of Britain's super wealthy, with many blaming the impact of Ms Reeves' first Budget in October. And Britain experienced its most significant drop in billionaires ever last year, according to the Sunday Times Rich List. The non-dom regime was replaced by the chancellor with a residency tax under which those living in the UK for more than four years are made to pay income and capital gains tax on overseas earnings. Those who stay long enough also face paying inheritance tax on overseas assets.
Telegraph
4 days ago
- Business
- Telegraph
Reeves considers reversing non-dom tax raid after millionaire exodus
Rachel Reeves is considering reversing an inheritance tax raid on non-doms amid mounting evidence that it has sparked an exodus of the wealthy. The Telegraph understands the Chancellor is weighing up whether to reverse her decision to expose people's worldwide assets to 40pc inheritance tax. Senior City sources said they had been in talks with the Government about how to 'create something more competitive' adding that the focus has 'very much been on the inheritance tax implications'. Varun Chandra, Sir Keir Starmer's business adviser, is understood to be spearheading the negotiations. Ms Reeves scrapped non-dom status in April, a change that had been widely expected. However, the Chancellor also introduced the sweeping inheritance tax changes, which have been blamed for driving some of Britain's richest people abroad. Leslie Macleod-Miller, the chief executive of Foreign Investors for Britain, told the Telegraph: 'Inheritance tax is certainly the red line. Research conducted by Oxford Economics said that overwhelmingly inheritance tax was the reason why people would be forced to leave.' Those to have left in the wake of the tax changes include Richard Gnodde, Goldman Sachs' most senior banker outside the US, and Aston Villa co-owner Nassef Sawiris. Steel magnate Lakshmi Mittal is also preparing to move abroad. Ms Reeves's decision to look again at the inheritance tax changes suggest they may have sparked a bigger reaction than anticipated. Anthony Whatling at Alvarez & Marsal, who advises the wealthy on how to structure their assets, said: 'The inheritance tax change is perceived by many as the most contentious aspect of the non-dom reforms – complex and globally out of step. 'If the Government wants to keep wealth – and the business that follows it – in the UK, this is the lever it needs to pull.' Reversing the policy would be relatively affordable for the Chancellor. While the overhaul of the non-dom regime is projected to bring in £4.5bn by the end of the decade, only £200m of that is expected to come from the inheritance tax change. Without action, Ms Reeves risks raising far less than hoped from her package of changes. If 25pc of non-doms quit the UK, the Treasury would make no extra money from scrapping the tax status. If a third left, the UK would lose £700m in the first year of the policy, according to the Centre for Economics and Business Research (CEBR). The Office for Budget Responsibility has warned that its forecasts for the amount of cash raised by the changes are highly uncertain, as they hinge on the behaviour of a small group of people who are highly mobile. Foreign Investors for Britain has been lobbying for a simpler tax regime more akin to Italy, where wealthy foreigners can pay a specified annual fee to exempt their overseas assets and income from tax charges. In Italy, this fee ranges from €100,000 to €200,000 a year. Mr Macleod-Miller said he would be 'delighted' if the Government listened to his pleas. He said: 'Every other government is listening to this group, and they're making their tax plans accordingly. But if we continue to drive wealth from this country, the only thing that will happen is that taxes will rise. This will be a country where wealth and growth are simply not welcome.' A Treasury spokesman said: 'The UK remains highly attractive. Our main capital gains tax rate is lower than any other G7 European country and our new residence-based regime is simpler and more attractive than the previous one, whilst it also addresses tax system unfairness so every long-term resident pays their taxes here.
Bloomberg
08-06-2025
- Business
- Bloomberg
How Does the UK's New Tax Policy Affect Where the Ultra Wealthy Live?
The end of the non-dom rule is sending millionaire Britons to new cities in the EU, but is it really a wealth exodus? (Source: Bloomberg)
Telegraph
21-05-2025
- Business
- Telegraph
‘I love the UK but there's a limit': Rayner's tax plans threaten fresh wealth exodus
Angela Rayner's proposed tax raid on savers and investors would trigger a fresh exodus of wealth creators from Britain, ministers have been warned. Andy Bell, the founder of AJ Bell, one of Britain's biggest consumer stockbrokers, warned that a blueprint drawn up by the Deputy Prime Minister would prompt businesses leaders and entrepreneurs to leave Britain. Many wealthy non-doms have already moved elsewhere after Labour scrapped the tax status earlier this year. Mr Bell said: 'Angela Rayner seems to think the answer to the UK's productivity problem is to tax anyone who's still producing. If the Government isn't careful, the non-dom exodus will extend to business leaders and entrepreneurs.' He added: 'I love the UK and have always seen paying tax as a sign of success, but there is a limit.' The comments come after The Telegraph revealed that the Deputy Prime Minister lobbied Rachel Reeves, the Chancellor, to consider further tax increases in her Spring Statement rather than cut welfare spending.
