If Labour wins the general election next month and moves forward with plans to remove tax safeguards on offshore riches that they wished to pass on to future generations, private banks and advisors to Britain’s ultra-wealthy customers fear that some of their clients may leave the nation.
The Labour Party of Keir Starmer, which is leading in opinion polls and released a new manifesto on Thursday, is aiming to win over the wealthiest citizens of Britain by promoting public spending on welfare, education, the National Health Service, and energy reform.
Approximately 70,000 British citizens who earn money abroad but pay little or no UK tax were already facing increased costs after the Conservative administration in power announced in March that it would gradually remove their “non-dom” status.
However Labour said it would move more quickly to eliminate the exemption on foreign-earned income and broaden Britain’s inheritance tax structure to cover foreign assets held in trusts intended to offset such levies in proposals announced in April.
Opponents claim that rather than improving total tax receipts, the proposed changes would worsen Britain’s already weak economy by deterring rich individuals from moving or investing there.
Laptops 1000No matter who wins the election, economists predict that overall tax levels would likely approach an all-time high despite major tax rates being promised not to rise by either of the major parties.
Labour has declared that it will neither increase working people’s income taxes or National Insurance social security contributions.
However, it has committed to reducing the difference between taxes received and owed in the UK, which increased by 5 billion pounds to 36 billion pounds ($46 billion) for the 2021–2022 tax year.
Burges Salmon partner Catherine de Maid noted that while her biggest customers were willing to pay higher income and capital gains taxes, the inheritance duty proposal was a “deal breaker” for three of them.
