‘Reckless and self-defeating’: Leading wealth manager slams possible exit tax
The head of a leading financial advisory and wealth management firm has slammed plans to impose an exit tax on wealthy Brits fleeing the UK, arguing it would leave lasting damage on the country.
Reeves is reportedly looking at a possible 20 per cent “settling-up charge” on business assets, which is the rate of Capital Gains Tax (CGT).
It is thought the policy would raise around £2bn, with the Chancellor facing a fiscal black hole of up to £35bn to fill at the November 26 Budget.
But Nigel Green, CEO of financial advisory and asset management firm DeVere Group, has warned that the tax would be “reckless and self-defeating”.
Green said the proposal would inflict lasting damage on the country’s competitiveness at a critical time.
“The government seems determined to make the UK an increasingly unattractive place for wealth creators.
“The introduction of an exit tax would accelerate the exodus of entrepreneurs, business owners and investors who already feel punished for their success,” he said.
Exit tax would ‘destroy confidence’
Green argued that an exit tax would fail to raise meaningful revenue and cost the Treasury “far more” in lost economic activity than it could ever recoup through short-term taxation.
“Investors and business leaders are already viewing the UK with increasing caution,” Green said.
“They’re redirecting capital to economies that reward ambition and provide stability. Britain should be working to attract international wealth, not signalling that it intends to penalise it.”
He added that DeVere has already seen a significant rise in domestic and global investors rethinking their exposure to the UK due to a perception that the Governmernt is unfriendly for private capital.
A wave of company directors have already left the UK since the government unveiled a host of punitive tax rises on the wealthy at its maiden Budget last autumn.
According to an analysis of Companies House data, 3,790 company directors removed Britain as their official country of residence between last October and last month, a steep rise from the 2,712 that did so over the same period the previous year.
The former boss of London-listed consumer giant Reckitt Benckiser, Bart Becht, FTSE Russell founder Mark Makepeace and AC Milan and Miami Football Club-backer Riccardo Silva were all found to have left the UK since the Budget.
“The abolition of the non-dom regime, rising corporate taxes and the highest personal tax burden in decades have all eroded confidence. An exit tax would be the final signal that the UK is no longer open to wealth, investment or aspiration,” Green said.
“The Chancellor should be working to attract entrepreneurs and innovators, not creating new obstacles. Prosperous economies are built on encouraging growth, not constraining ambition. Imposing a departure charge is the economics of retreat.”
The Treasury declined to comment.