Wealthy foreigners living in the UK have for months feared the new budget, in which the new Labor government promised to withdraw a historic tax holiday that this group has enjoyed for centuries. And, ahead of that moment, the lobby group Foreign Investors for Britain (FIB) on Thursday proposed replacing it with a new tax that would impose a “flat rate” based on wealth level, instead of forcing them to pay taxes at ordinary levels of personal income, capital gains and inheritance tax.
British law so far allows citizens who live in the UK but have established legal residence in another country not to be taxed on their income outside the UK, nor to have to pay inheritances that they receive outside the said country. If this exemption is withdrawn, these 74,000 peoplemostly large foreign assets living in London, will have to pay tax on all their assets, regardless of where they are located.
The result is that many of these people are threatening to leave the UK, taking their wealth and investments with them. The FIB pressure group estimates that these people have invested a total of £8.5 billion in the country since their arrival and estimates that, in the worst case scenario, His departure could result in a loss of 1 billion millions for the British Treasury.
Instead, the FIB proposed to the government the possibility of charging a progressive flat-rate tax on the assets they own outside the country. For example, people who had up to 100 million pounds would bring in 200,000 pounds a year, and those who had more than 500 million would have to pay an annual “package” of 2 million. In exchange, they would continue without having to pay income, capital or inheritance tax on assets acquired abroad.
“If there is no stability, people will consider leaving,” warned Leslie MacLeod Miller, CEO of Foreign Investors for Britain, in an interview with CNBC. Miller has already scheduled meetings with the government to discuss his proposals. “Those with deeper pockets often have longer legs, so it’s important to understand them,” he said. According to their studies, 98% of billionaires surveyed would consider leaving the country if the exemptions were simply removed, but Only 10% would rather pack their bags and leave their London home than accept the proposed system. fixed taxes in installments.
This idea is a “improved” version of the law that currently exists in Italyexplains Dominic Lawrance, partner at Charles Russell Speechlys and co-author of the proposal. In Italy, only an annual payment of 200,000 euros is required, regardless of the level of wealth of these assets. The idea of setting higher bands for those with a lot more money would allow the UK Treasury to collect more and give a greater appearance of tax justice, he says.
New Finance Minister Rachel Reeves will present this year’s accounts on October 30. It is expected to include a series of tax rises to plug the budget hole of around £20 billion inherited from the Conservative government. In addition, it will need to increase its revenues even further to be able to inject new money into public services, such as health or prisons, on the verge of collapse for lack of investment.
