Rich Britons prepare to flee the country
Filed under: Tax
So why are they leaving, and should we be worried about it?
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The exodusThe deVere group says that wealthy Brits are thinking carefully about a move overseas. Nigel Green, chief executive of the deVere Group, says: "Between January and the end of June, there was a 37% increase in enquiries from people with savings and investments worth more than £250,000 who are considering living abroad, compared to the same period in 2011."
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Why they are going?The primary reason for the move appears to be an increase in the taxes on the very wealthiest people - from income tax to higher stamp duty on their expensive properties. Green says: "The vast majority of these people tell us that they want to maintain their lifestyle in retirement and protect their current level of wealth and that the most effective way to do this is to move themselves and their funds out of the UK to a jurisdiction where they will be taxed considerably less."
However, money is not the only reason for this flood out of the country. Green says that amongst those planning a move, there are also serious concerns about the state of British society. He explains: "Wealthy Brits say they are looking to leave the UK as they believe crime and anti-social behaviour is soaring and they are seeking a higher quality of life in countries which boast a safe, family-orientated lifestyle. Of course, this year's dismal weather has also been a contributing factor to the growing numbers of Brits thinking about quitting a rain-soaked Britain for a life in the sunshine."
He adds that he expects the trend to continue through the year and beyond.
The figures reflect earlier statistics from Lloyds TSB International Wealth, which found last month that 19% of wealthy UK adults are considering leaving at some point in the next couple of years.
So should we be worried?On the one hand, unless you run a champagne bar, or sell thousand pound handbags for a living, you may not consider this to be particular cause for alarm. It'll certainly make it easier to get a taxi in London.
However, there are two reasons why all of us may end up worse off if the wealthy flee the country. The first is that instead of higher tax rates for the wealthy leaving us with more tax income, we will lose the cash from this group altogether. The government isn't going to be happy with having less in Treasury coffers, so the end result will be more tax for the rest of us.
The second reason is that losing wealthy people means losing people who could stand to make a big difference to the economy: either by spending money and thereby supporting companies; or by building businesses themselves, employing people who in turn will pay tax and spend more, and help stimulate the economy.
Without the wealthy, all these stimuli are lost.
Of course, you could argue that the wealthiest are already dodging tax, and that it's the less wealthier and hungrier who are building the businesses that will drag the UK out of recession. But what do you think? Let us know in the comments.
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