Half The 'Super Rich' To Leave Or Sell UK Investments, New Research Indicates

by Jason Gorringe, Tax-News.com, London

01 February 2008

The Society of Trust and Estate Practitioners (STEP) published research on Friday which suggested that UK government plans to tax the foreign super-rich will be counter-productive, as tax revenues will fall and UK investments will be sold.

The research showed, according to STEP, that over half of the UK’s super wealthy are leaving, making contingency plans to leave or sell their UK investments.

“For the first time we can confirm that wealth generators are preparing to leave the UK in significant numbers. We now know wealthy foreigners invest between GBP75 and GBP125 billion in the UK and pay GBP7.16b in tax. Instead of generating more revenue the Government’s proposals will mean jobs, investments and tax revenue going abroad,” argued Keith Johnston, STEP’s Director of Policy, who conducted the study.

“The super rich already pay 54 times more tax than the average. We want rich people in the economy, paying tax, and creating jobs but government plans will have the opposite effect,” added David Harvey, CEO of STEP.

It is not only the tax that the UK would lose if Government proposals go ahead as planned, STEP warned. Non-doms spend GBP16.6b in the UK every year – equal to the GDP of Luxembourg.

Even more strikingly, the resident non-doms surveyed invest over GBP40b in UK businesses, and the UK business investments of all non-doms have been estimated at around GBP125 billion.

The current proposals provide an incentive to invest anywhere else, the Society cautioned.

Recommended