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The attempt to exceed his conservative predecessor to tax the taxation of the rich has proven to be a costly goal for the British Labor government. A wave of “non-cathedral” constant at home for tax purposes outside of Great Britain is hiking after the work has made its global assets liable for inheritance tax, with the economy and jobs being hit. Chancellor Rachel Reeves thinks reversal the decision; You should do this immediately. But even that is probably too little, too late to repair a large part of the damage that has already been done.
The 200-year-old non-DOM regime, which enabled the residents to explain a different country as a tax-contrary and excessive manner and had to reform. A conservative Chancellor, George Osborne, tightened the rules in 2017; Jeremy Hunt, a successor to Tory, announced last year that he would scrap the regime from April 2025 – which appropriates a labor policy. Labor came into office to be determined Set his stamp Back in the change and additional income where it could. A gap closed. The Tories had deliberately left open, so that the inheritance tax on assets in offshore trust could not avoid inheritance tax.
This was a final straw for many wealthy people who are dissatisfied with the increase in the change and labor tax of non-domestic, e.g. B. value creation tax for private schools. The official figures are low, but many financial advisors and lawyers report that between a quarter and a third of their wealthy non-Dom customers are Leave Great Britain For more tax -friendly places such as the United Arab Emirates, Italy or Switzerland.
The reversal of the IHT change would only be a further blow to the Chancellor’s authority after the government had to Scrap plans Dedicate winter fuel payments from millions of pensioners. The non-dom changes are popular with the base of Labor. But the government should accept its mistake and correct it. The larger than expected investor Exodus questions the 2.5 billion GBP per year, average additional income that the office had projected for the budget responsibility from the rules of Labor. The Center for Economic and Business Research estimated Last month that if a quarter of non-Dom taxpayers leave the United Kingdom, the net profit of the Ministry of Finance would be zero. A higher emigration would lead to a net loss.
In addition, the lost economic contribution of wealthy non-domes by investing, creating jobs, expenses and philanthropy takes into account. Many cultural institutions fear financing losses. And wealthy non-britons are Leave At the same time as there are family businesses in Great Britain be hit According to Labor’s Surprise, they are limited to limit their relief to IHT.
In other countries, the efforts of advertising for financial switches are overthrown. New foreign investors in Italy can pay a flat -rate tax of € 200,000 for foreign income and assets for 15 years, without the inheritance tax on foreign assets during this time. A foreign investor lobby group argues that the United Kingdom should replace its non-Dom regime with a graded system.
It is probably too late to not withdraw, which have gone back, even though the removal of IHT could help to prevent others. Therefore, the government must find ways to attract new foreign investors and entrepreneurs and ensure that the United Kingdom is still attractive – especially too American dissatisfied by the Trump administration. Many British financial advisors state extended to compete with the offers of the competing countries.
There is also a strong case for a new British investor visa that replaces a scrapped foreigner in 2022, which is willing to invest in areas such as AI, clean energy and strategic infrastructure. Ensuring the wealthy payment of a reasonable share of tax makes sense. However, the resuscitation of UK growth has to be able to rewrite those who contribute to this goal and cannot drive away.
