High net worth investors expect the number of wealthy people leaving the UK to keep rising over the next three years, new research by Wealth Club has revealed.
The study found 86% of Wealth Club’s clients expect the trend of wealthy people leaving the UK for tax purposes to increase, with 39% expecting a dramatic increase over the next three years.
More than a fifth (22%) of those surveyed say they have wealthy friends or associates who have left the UK in the past 24 months because of higher taxes and the same number say they are considering leaving the UK and moving abroad themselves.
While the key financial reason for quitting the UK is high taxes (86%), nearly half (48%) also blame sluggish UK economic growth. Around a third (32%) point to the increased costs of running a business and 28% are worried by London’s loss of status as a financial hub.
Meanwhile, the main non-financial reason cited by 69% of respondents was political concerns, followed by lifestyle and worries about crime (61%). The most popular place to move to was Portugal, picked by 17%, with 12% choosing the Channel Islands or the Isle of Man. Only 7% picked the UAE.
Around a fifth (22%) of those considering leaving the UK expect to save at least £100,000 in tax in their first year abroad with one in 12 (8%) expecting to save more than £500,000.
Alex Davies, founder and chief executive of Wealth Club, said: “Wealthy people are increasingly leaving the UK because of taxation issues, and wealthy investors expect the trend to accelerate.
“An exodus of the wealthy is bad news for Government tax revenues, both short and long term. The top 1% of UK taxpayers pay a third of all income and capital gains tax. Last year alone, just 100 individuals contributed £4.1 billion. If even one leaves, that’s a big hole in the public finances.
“Longer term, anyone who leaves doesn’t just stop paying tax here – they stop shopping, setting up businesses, employing people, buying houses and investing.”
Davies added: “The Government risks creating a culture that seems hostile to achievement. The Chancellor needs to wake up and smell the coffee.”
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