David Lesperance, a top UK tax and immigration advisor, has been assisting high-net-worth individuals in managing their finances. Recently, he revealed that due to the looming Labour tax hikes, eight of his super-wealthy clients have sought his help in leaving the UK. The potential increases in capital gains and inheritance tax rates, along with the introduction of an “exit levy” for wealthy individuals leaving Britain, have raised concerns among the country’s leading taxpayers.
Lesperance’s clients, who are some of the top taxpayers in the nation, are looking to relocate to countries like Ireland, Italy, and Greece. Four of his eight clients are domiciled in the UK and are worried about the possible implications of the upcoming Budgets. The remaining clients are not domiciled in the UK. Concerns are mounting as Labour considers eliminating the non-domicile status, a rule that allows individuals with permanent homes abroad to avoid UK taxes on overseas income for up to 15 years.
The proposed “exit levy,” which could be a one-off capital gains tax charge on UK profits, is aimed at discouraging wealthy individuals from leaving the country. This concept has led to a surge in demand for Lesperance’s services. The UK is among the few countries that do not impose charges on wealthy individuals leaving the country, and the government views the “exit levy” as a way to generate more funds.
According to recent data, the UK heavily relies on a small group of wealthy individuals who contribute a significant portion of tax revenues. However, economists warn that driving these high-net-worth individuals away could result in substantial budgetary shortfalls. The Centre for the Analysis of Taxation proposed the “exit” tax to prevent the exodus of wealthy individuals from the UK.
As the Labour government prepares to present its Budget, concerns are growing about the impact of potential tax hikes on rich individuals. The Institute for Fiscal Studies has cautioned that a small group of wealthy people leaving the UK could create a significant gap in public finances. Former chancellor Nadhim Zahawi expressed his concerns about the accelerating rate of millionaires leaving the UK, calling it a “vote of no confidence” in the tax system.
With the UK expected to see a reduction in individual millionaires in the coming years, experts are urging the government to reconsider any tax hikes that could further drive away wealthy individuals. Zahawi emphasized the importance of attracting rich people from other nations to reside and work in the UK by revising existing tax policies. Maintaining a favorable tax environment for high-net-worth individuals could help prevent a further exodus of millionaires from the country.
