Rich plot exodus from Britain to escape Labour’s wealth tax raids

Millionaires are looking to flee the UK in their droves to escape Labour’s tax raids – with a record number of wealthy Britons tipped to leave the country this year. Advisers to the UK’s richest households told yesterday how phones are ringing off the hook as their clients rush for the exit, as Chancellor Rachel Reeves plans to hike levies in its autumn Budget on October 30.

It follows Keir Starmer ‘s speech this week in which he painted a woeful picture of the state of the country’s economy, referring to financial ‘black holes’, as he braced the UK for a difficult Autumn budget. Finance experts have told high-net-worth families are packing their bags in a bid to protect their hard-earned assets – and some have already made the move.

One tax adviser, who asked to remain anonymous, said: ‘I almost feel like I should contribute to the Labour Party because of what they’ve done for our business.’ The fears come as drivers are also bracing themselves for fuel duty hikes, while the Chancellor has also ordered hefty savings targets for government departments. Sources told The Times the Department of Health has been asked to find savings worth around £1.3billion ($1.7bn) in time for the October budget, while officials at the Department for Education are also looking at how to save around £1billion ($1.3bn).

However, in Berlin yesterday, the Prime Minister insisted that, despite his doom-laden speech this week, he is optimistic. ‘This is actually a project of hope,’ he said, despite warning that the upcoming autumn budget will be ‘painful’. ‘But it’s got to start with the hard yards of doing the difficult stuff, of clearing out the rot first.’ But there are mounting fears that Labour is planning a slew of tax increases on pensions, property and investments. ‘Those with the widest shoulders should bear the heaviest burden,’ the PM said in his address from the Downing Street rose garden, a signal that wealthier homes would face the brunt of incoming tax hikes.

Advertising mogul Martin Sorrel, the founder of agency WPP, said he has friends who are fleeing the UK. The exodus ‘started with non-dom changes’ and is ‘inevitable given coming tax hikes’, Mr Sorrell, who now runs S4 Capital, said. Charlie Mullins (pictured), the founder of Pimlico Plumbers, who has already left the UK for Spain, said it is ‘a typical socialist money-grab’. ‘But, like most such policies, it won’t raise what they think, but it will kill off investment.’ He added: ‘People will pay over the odds to live in their native country, but even the most loyal Brit will abandon ship if the environment becomes too hostile.’

It has also been reported that Rachel Reeves could use the Autumn Budget to bring capital gains tax in line with income tax rates, which would hike the upper band to 45 per cent. The gain made is taxed, rather than the amount of money received, and it must be paid on a series of ‘chargeable assets’. These are currently defined as most personal possessions worth £6,000 ($8k) or more, apart from a car,; property that’s not your main home; your main home if you’ve let it out and any shares that are not in an ISA or PEP.

Pensions are also expected to be a priority area for Labour in the budget, with rumours over a raid on pension tax relief that high earners receive on contributions. And the Government is also considering raising inheritance tax, currently 40 per cent on estates worth in excess of £325,000 ($430k). Current rules mean there is normally no inheritance tax to pay if either the value of your estate is below the £325,000 ($430k) threshold; or you leave everything above this mark to your spouse, civil partner, a charity or a community amateur sports club.

The £325,000 ($430k) threshold has been frozen since 2009 – and the standard tax rate is 40 per cent, which is only charged on the part of the estate above the threshold. Another potential target is Individual Savings Accounts (ISAs) which allow people to save up to £20,000 ($26k) a year in shares or cash, which are tax-free for gains and withdrawals. While the annual amount you can save is not expected to be varied, there are suggestions that the Government could impose a lifetime cap.

The Resolution Foundation think tank previously said this could be set at £100,000 ($132k), suggesting the current setup mainly benefits those with high disposable income. The UK is expected to see an unprecedented net loss of 9,500 millionaires in 2024, according to consultants Henley & Partners. Tax and citizenship advisers to some of the UK’s wealthiest families have seen a sharp increase in enquiries about moving abroad, to lower tax regimes, since Labour won the election. Favourite destinations include Italy, Dubai and Ireland. Peter Ferrigno, director of tax services at citizenship advisory firm Henley and Partners, said his firm has gone from receiving very few queries before the election to several-a-week since. ‘Judging by how busy we are, it is a concern for absolutely everyone,’ Mr Ferrigno said. ‘It is the difference between having enough money to retire or not having enough money to retire. [Clients feel it is] forcing their hand’.

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