Last week George Osborne, Chancellor of the Exchequer predicted that Brexit could cost the UK £200 billion in lost trade and a further £200 billion in foreign investment within 15 years. Does anyone believe him?
The outlandish announcements started with the Prime Minister stating that he had secured ‘fundamental reforms’ in the EU which meant he could now confidently put his weight behind the decision to remain in the EU. But the British people know that the EU is not set to change despite the claims of our Prime Minister to the contrary.
The polls regardless of the barrage of lies and half-truths have not budged. The British people are not stupid; recent attempts by the Prime Minister and his Chancellor to pull the wool over our eyes are not working.
There are many people in this country proud to be British. Our little rain swept island has created more jobs than all the other European countries put together and we are now the fifth largest economy in the world. Why do we need to believe politicians who say we cannot go it alone – we can, but do we have the politicians we need with the innovation and guts to make a success of it?
We need to look at how countries outside the EU have fared and take a leaf out of their book. Switzerland, for example is outside the EU and yet it has twice the GDP per capita than we have in this country. Can we take some of its policies and adapt them to our country.
First we could change our attitude towards the wealthy who are keen to live and buy homes in the UK. Rather than encouraging them to leave their wealth offshore we should legislate to incentivize them to bring wealth into the UK. This could be achieved very simply by introducing an exemption from UK tax for all monies brought into the UK which are invested or managed in the UK.
This exemption could then be extended such that any monies, which were brought into the UK but not managed or invested should be charged to income tax – regardless of source. This would wipe out a lot of wasted time and effort in trying to work out the source of funds and the correct amount of tax payable. It would also be much fairer; taxing monies which are spent in the UK.
In line with this thinking, I would extend the exemption of the excluded property settlements to trusts with UK trustees which are managed or invested in the UK. The UK is the founder of the trust, and we should do what we can to make sure we capitalise on our creation rather than provide opportunities for offshore financial centres such as the Bahamas, Jersey and Cayman Islands to thrive. In this way excluded property trusts would be much more transparent to everyone, would create jobs for our trained and skilled professional members and bring more monies into the UK to be managed. All disputes affecting such trusts would also have access to our UK court system and skilled lawyers.
The government could further encourage wealthy foreigners as well as those who are already living in the UK to bring monies into the UK by introducing an amnesty for all non doms who are concerned that inadvertently they have not declared all monies which are offshore but the source of the funds is uncertain (but not illegal). This would be particularly attractive in the buildup to the Common Reporting Standard in 2017 when taxpayers would prefer to locate their wealth to a jurisdiction where the administration and compliance rules are well understood and properly applied.
George Osborne talks about the house price crash if we were to leave the EU, and yet ironically he has done everything possible to freeze the housing market and drive down prices. He has ratcheted Stamp Duty Land Tax to 12% (15% for second homes), which has not only sent the tax take spiraling downwards, stalled the upper end of the market, but has also had a profound impact on the industries which serve these homes; architects, builders, interior decorators, estate agents, surveyors and many more.
What the country will decide on the 23rd June, I have no idea, but I am concerned on two counts. First, if the country votes marginally to stay in, the uncertainty about the future of the European Union will remain, second if we vote to go out, do we have the political innovation in government to make going it alone the success, I think the British people are capable of. I am proud to be British, and I think we could once again be Great, but do we have the politicians in government who believe in us, and have the experience and guts to take us there?
Caroline Garnham is CEO of Garnham Family Office Services, if you would like to receive her weekly Note or book an appointment with Caroline or any of her team to discuss any concerns as to estate planning, succession, offshore trusts, dispute resolution, matrimonial or other non-investment issues write to firstname.lastname@example.org or call 020 3740 7423.