In 1799, King George III of England approved a law that allowed the managers of the British Empire not to pay taxes in the United Kingdom if they spent most of the year outside Britain, ruling their colonies around the world. 225 years have passed since then, the Empire is long gone and that law now has a new use: billionaires living in the United Kingdom can avoid taxes on income earned abroad if their official residence is in another country. A legal ‘trick’ which helps attract high net worth individuals to the most remote areas of London, and which the new Labor Government has threatened to abolish completely, has no concern among these millionaires.
In total, in 2023 there was 74,000 people took advantage of that option. And according to a study published this Friday by Oxford Economics, two thirds of these ‘non-resident’ residents are preparing to leave the country in the next two years if the law changes and they have to pay Personal Income and Inheritance Tax. In particular, 83% believe that the inheritance tax is the main reason for moving to another country.
In April, the previous ‘Conservative’ Government reduced the benefits of ‘non-resident’ millionaires, after a scandal broke out regarding The wife of the Prime Minister at the time, Rishi Sunak, had taken advantage of this law to avoid taxes.. Until then, full benefits lasted 15 years, after which they were reduced. This year’s legal reform shortened the grace period and set a timetable for its complete abolition. But the current Finance Minister, Rachel Reeves, plans to reduce the exemption to 4 years and make everyone who spends more than 10 years living in the country pay an inheritance, wherever they live. And that duty would continue for 10 years after they left the United Kingdom.
The result of these changes is that The march of millionaires that started this spring is accelerating since Labor won the elections: Many large capitals are preparing to leave for France, Greece, Cyprus, Italy, Malta, Spain or Portugal, which offer tax benefits of various types, such as the Spanish ‘Beckham Law’ . But the most attractive destinations are still tax havens, such as Switzerland, Dubai, Monaco or the various Caribbean islands that do not have personal income tax.
So, Oxford Economics calculations show that 9,500 billion people could leave the UK this yearmore than double the marches recorded in 2023. As a result, the 3 million pounds that the Government wants to raise with the increase in taxes on that fund could remain at one million (in most cases) or even a reduction of one. million, because all these billionaires pay a high level of consumption of luxury goods and housing taxes.
In fact, the London real estate market is starting to feel the fall in demand for these great assets. According to the Knight Frank group, sales of homes worth more than £10 million have fallen by 22% year-on-year to July, and those of more than 30 million have fallen by 75%.
But Stuart Bailey, head of luxury sales at Knight Frank, believes that these changes open up a new opportunity for a very special group: American millionaires. The US already makes all its citizens pay taxes on everything they earn outside the country, so changes to the British law would not affect them . AND The flight of the rich from the rest of the world eliminates competition for these homes: “Americans with a lot of money would have to be crazy not to think this is a good time to buy,” he says.
2024-09-21 06:13:22
#Foreign #billionaires #prepare #flee #tax #exemption #disappears
