EXCLUSIVEEight of my millionaire clients are fleeing the UK due to threat of Labour tax raid: Top advisor reveals how the wealthy are leaving for Ireland, Italy and Greece
A leading tax and immigration advisor to the ultra-wealthy has revealed he is helping eight clients make plans to leave the UK due to the threat of Labour tax hikes.
A leading tax and immigration advisor to the ultra-wealthy has revealed he is helping eight clients make plans to leave the UK due to the threat of Labour tax hikes.
David Lesperance told MailOnline that feared rises to capital gains tax, inheritance tax and the possible introduction of an exit levy for wealthy leavers risked scaring off some of Britains biggest taxpayers.
His warning follows forecasts that the country is set to lose a fifth of its millionaires under this Labour government - becoming the worst nation in the world for millionaire exits.
Experts have repeatedly warned of the countrys reliance on a tiny number of wealthy people to pay a large proportion of its tax take, with the prospect of major budget shortfalls if even a small number leave.
Mr Lesperance said the clients he was helping to formulate their exit plans were currently paying a substantial amount of tax in the UK.
David Lesperance told MailOnline that feared rises to capital gains tax, inheritance tax and the possible introduction of an exit levy for wealthy leavers risked scaring off some of Britains biggest taxpayers
He told MailOnline: Four are non-doms and four are domiciled in the UK. The domiciliaries are worried about the possibility of an exit tax and what the next Budget will be and the one after that when the current one does not raise the enough revenue.
Five of them are going to Ireland, two to Italy and one to Greece, but they may end up moving elsewhere eventually.
Labour is planning to continue Conservative plans to abolish non-dom status, a 200-year-old system allows people with their permanent home overseas to avoid paying UK tax on foreign income for up to 15 years.
Non-doms are still required to pay tax on any income of profits from investments they make in the UK.
Mr Lesperance said many of his clients viewed exploring a new residency as a form of fire insurance which could be enacted if Labours policies towards the wealthy became more hostile.
We wont know what happens in the Budget until October 30, so a lot of clients are preparing for the worst and hoping for the best, he said.
The idea of imposing an exit tax on wealthy leavers was suggested last week by economists at the Centre for the Analysis of Taxation (CenTax) as one way to discourage the super-rich from leaving.
Pimlico Plumbers founder Charlie Mullins is one of the most high profile figures to announce plans to leave the UK
However, Mr Lesperance said fears on a levy - which would most likely come in the form of a one-off capital gains tax charge on profits made in the UK - had in fact accelerated interest in his services.
He believes the possibility of an exit tax is becoming more likely due to the UK being one of the few countries that do not already have one and its attractiveness to ministers looking for a way to raise funds.
Mr Lesperance warned that the UK was extraordinarily dependent on a tiny number of wealthy people who were responsible for paying a large proportion of taxation and should be wary of scaring off these golden geese.
He added that non-doms who had stronger roots in the UK - such as foreigners who work in the City - had more life inertia so were less likely to leave than Times Rich List type people who did not need to remain in London to make or maintain their wealth.
It comes as new data revealed last week that sixty of the UKs richest people collectively paid more than £3billion a year in income tax.
The total tax paid by the cohort is roughly equivalent to two-thirds of the extra spending Labour has committed to in its manifesto.
Each of the 60 individuals who paid the most income tax had an income of at least £50million in 2021/22, the BBC found through a freedom of information request to HMRC. They are likely to have paid a large amount in other taxes too.
The ASIs Millionaire Tracker suggests that the UK is set to lose 9,500 liquid millionaires
As Rachel Reeves readies for her first Budget this month, the Institute for Fiscal Studies warned the Treasury has to be aware that a small number of this ultra-wealthy group leaving the country would create a relatively big hole in its finances.
Stuart Adam, a senior economist, said it would not require a significant exodus of the wealthy to hurt the public finances as tax payments are very concentrated on a small number of people.
Pimlico Plumbers founder Charlie Mullins is one of the most high profile figures to announce plans to leave the UK, with the entrepreneur saying he will sell his £12m penthouse and leave the country to avoid a Labour tax raid on his £145m fortune.
Labour has vowed not to increase income tax in the Budget, but it has not ruled out hikes to the likes of capital gains tax - which is levied on the profits from the sale of assets.
Ms Reeves controversially claims to have inherited a £22billion black hole in the public finances, and today a Treasury spokesman said it was addressing unfairness in the tax system to raise revenue to rebuild public services.
The UK is only one of three major nations set to reduce in individual millionaires over the next few years, along with the Netherlands and Saudi Arabia.
Others - such as Taiwan, Japan and South Korea - will see their own numbers rise by a third or more.
Labour Chancellor Rachel Reeves is feared to be gearing up for tax rises at her Budget this month
The ASIs Millionaire Tracker suggests that the UK is set to lose 9,500 liquid millionaires - wealthy individuals who hold over $1million in cash or investable assets - in 2024, meaning the UKs total number will fall to 593,000. This is far below the figure in 2007, when the UK had 708,500 liquid millionaire residents.
Former chancellor Nadhim Zahawi said: The rate at which millionaires are leaving the UK is a vote of no confidence in both our current tax and regulatory regime, and anti-business and anti-prosperity measures that could be coming down the line.
These individuals are often entrepreneurs and business owners. Their exit wont just reduce necessary funds for public services- it will decrease investment in the wider economy too.
I urge the Government to rule out anything in the Autumn Budget on October 30, that could drive them away even more.
They should instead be focusing on attracting more millionaires from across the world to make a home and set up shop in Britain. Abandoning anti-non-dom policies and abolishing or cutting anti-wealth taxes would be a vital first step.
