In 1985 I was ill in bed when the Budget was being read in the House of Commons. At the strike of a pen Development Land Tax was abolished – that was my area of expertise. I wondered whether it was worth going into work when better.
There must be many advisers – accountants, private bankers, lawyers, financial planners, estate agents and trustees keen to see what George Osborne will say tomorrow about the taxation of non doms – their clients. He seems hell bent on killing the golden goose; cutting down the tax reliefs which have made the UK such an attractive place to live for non doms.
Given the pace of change, most non doms living in the country, or who have homes in this country are not rushing to unravel their offshore structures. Many are sitting on their hands, even if it means paying more tax. They have not decided how they want to structure their investments or whether to stay or leave. Living in the UK has been so good for so long they are not convinced that they can no longer do whatever they want and not pay tax. They talk to their friends, neighbours and colleagues – who are also bewildered and waiting.
Their advisers are also waiting; waiting for the small print in the legislation. Will there be an exemption or planning opportunity?
If not then this rich community is still likely still to do nothing until after the referendum on Brexit.
David Cameron and George Osborne may be keen to stamp out the tax advantages for rich non doms – but will this policy be adopted by Boris Johnson and Michael Gove. If Boris and Michael are concerned about the country and serious about reducing our horrific debts, they should consider how best to use our new independence to attract more monies into the country; which must include making the country attractive to wealth creators.
As I wrote in last week’s blog, if following the referendum we see Britain leave the EU, there will be an opportunity to alter our policies to be more in line with Switzerland. If the new Government does so, in such a manner to give the UHNW community confidence and the electorate see the changes as fair we could see monies flooding into the UK; away from Switzerland and offshore tax havens. This will make everyone happy including accountants, lawyers, trustees, estate agents, architects, bankers, wealth managers and all manner or tradesmen shopkeepers and other service providers.
There are good reasons to introduce the changes. As a result of George Osborne’s hike in stamp duty land tax we have seen a dramatic fall in property sales above the £4 million mark and a consequential drop in the tax take in Westminster, Kensington and Chelsea by about one half since 2012/13.
Whatever George says tomorrow in his Budget statement, I doubt whether we will see a return of confidence or a boost to our economy. The next date for optimism will be the referendum. If we are out of the EU, then we will again need to wait to see what policies will be adopted by Boris and Michael. I for one will be lobbying hard for them to take a leaf out of the Swiss book to attract foreigners to not only come to the UK, but to bring their wealth with them.
Having been an ardent follower and commentator on budgets over many years – I would like to see politicians axe taxes and lower rates. The irony is that the fewer taxes and lower rates we have– the more tax is collected and the more work there is for everyone – apart from a small handful of nerds.
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