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Britain could soon lose a good portion of its ultra-wealthy population.
The United Kingdom is considering a tax overhaul that could potentially scare away high-earners, Reuters reported on Friday. For centuries, Britain’s super-rich have been able to avoid paying taxes on income earned abroad. But recently installed Prime Minister Keir Starmer is thinking of doing away with the so-called non-dom system.
“The notion that the U.K. is simply too good to leave is incorrect,” entrepreneur Bassim Haidar told Reuters. “To be taxed so heavily on wealth generated outside Britain, perhaps years before people even moved to the U.K., is unfair.”
Starmer has said the new rules are meant to make the British tax system fairer and to raise money to fund public services, Reuters noted. Haidar and other multimillionaires are all for that, but to an extent. He suggested to the outlet that the government should instead create a six-figure annual tax on people who are worth more than £5 million, or $6.5 million. A £150,000 tax, he reckons, could raise an extra £4 billion a year for the British government. Other organizations have proposed a 2 percent tax for those making at least £10 million a year, Reuters wrote, which would only hit about 20,000 people but create an extra £24 billion.
Britain may be wise to heed what its ultra-wealthy population is saying. According to this year’s UBS Global Wealth Report, the U.K. is expected to lose almost one in six millionaires by 2028. By that year, the number of millionaires in the country will drop 17 percent to some 2.5 million people. Other countries, though, are set to see their millionaire populations rise in the same time period. Growth in the United States and France is expected to reach 16 percent by 2028, while we’ll see increases of 14 percent in Germany, 12 percent in Spain, and 9 percent in Italy.
“Wealth does not stay still anymore. It doesn’t have to,” David Lesperance, managing director of a tax-advisory firm, told Reuters. “The golden geese have wings and they will fly.”
If Britain decides to completely revamp its tax system, the super-rich may very well decide to flap those wings and take their dollars elsewhere in the world.
Authors
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Tori Latham
