UK wealth tax would spur millionaire exits to US: survey
The US tops the rankings among wealthy Britons for potential relocation, followed by Canada, Australia and the United Arab Emirates
[LONDON] More than half of UK millionaires in a survey signalled they would be more likely to leave the country if the Labour government introduces a new wealth tax.
About 60 per cent of the respondents also said that they thought they could have a better quality of life overseas, according to the survey by financial advisory firm Arton Capital. Nearly half of the questioned millionaire Labour voters indicated they’d be more inclined to exit if a new levy was brought in.
The US topped the rankings among wealthy Britons for potential relocation, followed by Canada, Australia and the United Arab Emirates, according to Arton’s survey, indicating a desire for lower-tax environments and English-speaking countries. The firm polled more than a thousand UK residents with a net worth of at least £1 million (S$1.7 million) between the end of July and early August.
UK Chancellor Rachel Reeves is struggling to fill an estimated £20 billion to £25 billion hole in the public finances, after Labour partially reversed spending cuts such as a reduction in winter fuel subsidies and a reform of disability benefits amid a backlash from its own members of parliament. While she’s ruled out increasing income tax, VAT and national insurance, Reeves hasn’t quashed talk of a possible wealth tax – prompting speculation that such a policy could come in her autumn budget.
While a straight wealth tax is thought to be unlikely in some government circles, as it risks spooking those who have the money to invest in the UK, Reeves may consider raising taxes on wealth more broadly, such as capital gains and corporation tax.
“The UK is at a tipping point,” said Armand Arton, chief executive of Canada-based Arton Capital. “There are many repercussions of the introduction of a levy, but one thing is clear: the longer that unpredictability persists, the greater the risk of losing capital, talent, and long-term investment to countries that offer greater security for individuals, families, and their futures.”
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To be sure, the survey captures only a snapshot of wealthy Britons. But it echoes data compiled by Bloomberg showing a big spike in departing business leaders over recent months. Still, 66 per cent of British millionaires view the United Kingdom as an attractive place to invest when compared to other countries, according to the survey.
Some 82 per cent of millionaires surveyed said they would be interested in investing in a so-called golden visa or Citizenship by Investment programme abroad. The UK scrapped its own form of this programme in 2022 over worries it was being exploited, though ministers are thought to be considering a new plan for foreigners who invest significant sums. BLOOMBERG
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