A Porsche 911 Carrera GTS car parked outside a Chanel store on Bond Street on October 16, 2023 in London, United Kingdom.
Mike Camp | In pictures Getty Images
LONDON — Britain’s super-rich non-dom are urging the government to introduce an Italian-style flat tax system to curb wealth outflows, as their priority status in the upcoming budget is threatened.
Foreign Investors for Britain, a lobby group made up of non-doms and their advisers, has teamed up with the think tank Oxford Economics to propose a tiered tax regime (TTR) to replace exemptions from inheritance tax (IHT). Amir will charge foreigners an annual fee. UK tax on non-UK assets and on overseas income and gains for up to 15 years.
Such fees would be levied according to an individual’s net worth, with proposed annual charges for those between £200,000 ($260,447) and £100 million, and £2 million for those worth more than £500 million. with This differs from the Italian government, which charges Recently doubled 200,000 euros per annum regardless of wealth category.
Foreign investors for Britain will meet government officials on Thursday to discuss the proposals.
“If there’s no stability, people are now planning to leave,” Leslie McLeod Miller, chief executive of Britain’s Foreign Investors, told CNBC on Wednesday at an event to announce the proposals. told
People with broad shoulders often have long legs.
Leslie McLeod Miller
Chief Executive of Foreign Investors for the UK
The UK’s non-dom status is a colonial-era tax rule, which allows people living in the UK but domiciled elsewhere to avoid paying tax on income and capital gains earned abroad for up to 15 years. By 2023, one estimate 74,000 people enjoyed this status, up from 68,900 last year.
Although the government has long been politically controversial, it has come under pressure in recent months following the Labor party’s collapse in August. Plans announced Advance the planned abolition of non-dom estates by banning the use of trusts to shelter overseas assets from IHT.
It comes as Finance Minister Rachel Reeves is expected to announce a bumper tax hike in her October 30 Budget as she tries to close the gap. Reported A £40 billion funding gap in public finances. The figure was previously reported at 22 billion pounds. The Treasury did not immediately respond to CNBC’s request for comment on the shortage or future discussions with the FIFB.
Non-doms transfer their money.
Reeves previously said that ending the program could lead to £2.6 billion ($3.38 billion) to the exchequer during the next government.
However, research by Oxford Economics last month warned that the plans would instead cost taxpayers £1 billion by 2029/30. In total, the 72 non-doms it surveyed were estimated to have invested a total of around £8.5 billion in the economy since their arrival in the UK.
“This is only a fraction of the amount invested by non-domes, so the investment is at risk,” Alex Stewart, associate director of Oxford Economics, said on Wednesday.
In fact, some have already started making preemptive moves.
New research released on Wednesday by the economic think tank showed that non-doms surveyed had already spent at least £842.2 million in anticipation of the changes.
Several non-doms attended the event, but who asked not to be named, said they were considering moving to jurisdictions such as Italy, Switzerland and Dubai if stricter plans were adopted.
According to Wednesday’s research, which surveyed 115 non-domes and 42 counsellors, 1 in 10 (13%) would still go ahead with a plan to quit if TTR was introduced, compared with 98% who Said that if they would leave the proposed flat tax system was not introduced.
We need to understand that we need people to invest here, to create the jobs, the wealth, the prosperity that we want.
Sadiq Khan
Mayor of London
“People with the broadest shoulders often have the longest legs, so it’s important to understand them,” McLeod Miller said.
Dominic Lawrence, a partner at Charles Russell Speechless, said the plans were an “improvement” to the Italian system in that they would be scalable along wealth lines, thereby generating additional tax revenue. Lawrence, who helped draft the proposals, added that they should be introduced in parallel with existing measures to end non-domicile status to “avoid any perception of a U-turn.”
Oxford Economics said it is currently working to determine an estimate of how much revenue the TTR proposals could generate.
Labor Court Wealth Builders
The Labor government has said it is committed to a solution. Injustice in the tax systempromises to close in its election manifesto. Drawbacks of non-dom tax. However, with Reeves, he has since softened his stance, according to the report. Rethinking Some elements of his non-dome crackdown.
Prime Minister Keir Starmer sought to promote Britain as a center for growth and wealth creation on Monday, as she gathered a group of 300 business leaders at Labour’s inaugural International Investment Summit.
London Mayor Sadiq Khan told CNBC at an event on Monday that the government must walk a fine line to avoid alienating wealth creators and ensure they “follow the rules.” Do it”.
Terraced houses at Westbourne Gardens in the Bayswater exclusive area near Royal Oak on January 13, 2023 in London, UK.
Mike Camp | In pictures Getty Images
“We need to make sure we understand that we need wealth creators in London and in our country. We need to understand that we need people to invest here,” Khan said. Do it, create the jobs, the wealth, the prosperity that we want,” Khan said.
“The key mission of this government is development and we, the people you are talking about, cannot develop without investment. I hope people will be reassured by what the Prime Minister said,” he added. .
The Lord Mayor of the City of London Corporation, Michael Minnelli, acknowledged on Monday that there was a “problem” with the non-dom laws but noted that the UK should continue to have a “competitive tax system”.
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