Leslie McLeod-Miller, CEO of Foreign Investors for Britain (FIFB), has spoken with Tom Bill, head of UK residential research at Knight Frank, about how he is spearheading lobbying efforts with the government to re-think its non-dom rules.
Bill said: “Wealthy overseas investors will be watching political events unfold over the next few months with particular scrutiny. The key focus is whether the government will tweak rules that have replaced the centuries-old non dom regime. Specifically, they will want to see a softer stance on applying UK inheritance tax (IHT) to assets held overseas.”
With party conference season kicking off next month, he added, investors will be hoping for some good news.
“Under the previous regime, non-doms could live in this country without paying UK tax on their overseas wealth. As well as the IHT proposals, the new rules impose a residence-based framework with a four-year time limit.”
The clear message from Leslie McLeod-Miller, chief executive of Foreign Investors for Britain (FIFB), on the latest Intelligence Talks podcast is that if they remain unchanged, the UK government can expect more wealthy individuals to depart, with a consequential drop in tax revenues that will tighten its “financial headroom.”
“It’s absolutely true that those with the broadest shoulders should bear the greatest burden,” McLeod-Miller remarked. “But those with the broadest shoulders normally also have the longest legs, and they are highly mobile.”
He goes on to say that investors are also concerned about speculation around a wealth, adding: “We are urging the Chancellor to confirm there will not be a wealth tax. So far, she has refrained from doing so but that is a dangerous thing. Historically, it’s clear that wealth taxes simply don’t work.”
With any changes to IHT rules, “the narrative has to be that the government needs to find more money order to maintain its promises, to help the ordinary working person, to provide things like school meals, and dentistry services.”
Tom Bill went on to say: “Part of the lobbying efforts include trying to convince the government about the merits of an Italian-style flat tax. Under a so-called tiered tax regime, investors would pay an annual sum to stay in the UK. The concept could eventually take the form of an investor visa.”
McLeod-Miller said: “If you look internationally, what are governments doing? They know they need to drive growth in their countries and so they are saying ‘come to me, come to me,’ which is what Trump did with his golden visa. Overall, people would be prepared to pay a premium for staying in the UK.
“If more people leave, the only thing left for the government to tax will be ordinary working people.”
Tom Bill concluded: “Over the next few months, the government has the power to make sure its language doesn’t get more dramatic.”
