ZCZC
BCN-10
BRITAIN-EU-BREXIT-ECONOMY
Ultra-rich attract interest in UK election campaign
LONDON, Dec 11, 2019 (BSS/AFP) – Britain’s general election campaign, which
ends on Wednesday night, has turned the spotlight on the closed world of the
ultra-rich.
The main opposition Labour party has repeatedly attacked tax avoidance and
evasion, and promised to renationalise key industries, including mail
delivery, energy and the railways.
Billionaire mobile phone magnate John Caudwell on Monday warned Labour tax
hikes for the top five percent of earners and business tax would stifle
investment.
But the ruling Conservatives, who are promising across-the-board tax cuts,
have been more accommodating, proposing few changes that would alter
Britain’s status as an attractive destination for the elite.
– Who are the ultra-rich? –
The Sunday Times in May said there were 151 billionaires in Britain. The
1,000 richest families and individuals have a record combined wealth of
œ771.3 billion ($1.01 trillion, 916 billion euros).
Those with the biggest fortunes come from across the world, including
Russia and Asia.
The Indian-origin Gopichand and Srichand Hinduja brothers head the list
with œ22 billion, with the Russian businessman Alisher Usmanov eighth, just
in front of his compatriot Roman Ambramovich.
– Favourable tax regime –
Britain owes its special status to its tax regime, especially the “non-dom”
status that allows some British residents to maintain fiscal residency
overseas and not pay income tax on earnings from outside the country.
“The UK provides an attractive tax regime for foreigners who have large
amounts of income from investments, because this is the easiest type of
income to shelter from UK taxation using the ‘non-dom’ regime,” said Andrew
Summers, from the London School of Economics.
According to the revenue and customs service, 78,300 people were classified
as “non-dom” in 2017-2018, allowing them to pay œ2 billion less to the
Treasury.
MORE/HR/1140
ZCZC
BCN-11
BRITAIN-EU-BREXIT-ECONOMY 2 LAST LONDON
Another advantage of the British tax system is that capital gains tax can
be offset by much lower taxes on property, even on the most expensive.
Unlike France, there is no fortune tax.
– Education and financial services –
Efun Chin, founder and principal of Mayfair Legal, said: “The UK has been
an attractive destination to many foreigners for many years, decades and many
reasons as well.
“It’s due probably to historical reasons where Britain used to have an
empire and many Commonwealth nationals would see the UK as the destination to
study because of the quality of the institutions.”
Meanwhile, anyone investing at least œ2 million in the country can get a
dedicated “Golden Visa” allowing them to stay for five years.
“It would definitely be a mistake to think that the only reason for a
wealthy person to move to the UK would be to save some tax,” said Summers, an
assistant professor of law at the LSE.
He pointed to “well-established advantages for doing business”, from
international openness, a favourable time zone, a widely spoken language and
respected legal system.
– Brexit and Labour: a deterrent? –
Despite the vote for Brexit in 2016 and uncertainty over the actual
departure date from the European Union, Britain is still a favourite
destination for the ultra-rich.
“Of course they were talking about Brexit but they have not been stopped by
Brexit,” said Chin.
Diplomatic tensions in 2018 between Britain and Russia for example can have
a much more important temporary effect.
Summers observed: “Its position as a gateway to the EU has also been an
important factor but this status is now less certain.”
In the short-term, there is the hypothetical victory at the election for
Labour, which has promised to target the rich.
“If Labour says they would like to close down independent private schools,
I think that would have an effect,” said Chin.
BSS/AFP/HR/1120