As the FT reports this morning:
Christopher Flowers, the veteran private equity investor, has moved to London from the US, seeing a shift in the balance of investment opportunities to Europe.
50p tax.
Or maybe 45p.
But coming none the less.
So let's stop the crap that the wealthy are all leaving, shall we?
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
I think you will find he’s a non-dom as he’s a US citizen. Therefore subject to US tax on his global income and gains. Will pay top rate income tax in the UK, which is higher than in the US, so he will build up foreign tax credits in the US which he can use within the ensuing 10 years.
Private equity is taxed very favourably in the US, so his non-dom status can help him to minimise his UK taxes on capital gains from private equity and so his global private equity gains will be no higher than the favourable US rate.
A US taxpayer moving to the UK to work in the UK in private equity is not an endorsement that the 45% or 50% rate is not a deterrent. It is pretty neutral for such US citizens.
As a non-domiciled UK resident, he will not pay any UK tax on most of his income. The funds he advises are based offshore, mostly in Bermuda, and therefore unremitted management and performance fees are not subject to UK tax.
If anything, this demonstrate that the favourable treatment offered to non-domiciled foreign nationals is a powerful tool to attract entrepreneurs.
But you make the point that we did not need to remove the 50p tax rate in that case
Thank you
For non-doms with private equity structures it wouldn’t matter if it was a 75% rate as it wouldn’t apply to most of their income.
The debate over the 50% rate is far more relevant to (a) nondoms not working in private equity, and (b) high-earning resdoms, as they cannot easily avoid it and so they have to consider voting with their feet.
“Entrepreneur” is he, then? Slippery word that “entrepreneur”, never sure about shaking hands with one. The FT called him a private equity investor. I have a much clearer sense of what sort of animal that is – definitely keep my distance and count my spoons.
The idea that a tax rate, be it personal or corporate, can determine a true entrepreneur to decide where they “choose” to exist as an entity is absolute bunkum. In all the stuff that has ever been written about ‘people’ wanting to do ‘business’ and promoting their success, the idea that their success will be ‘maximised’ by fiddling around and searching for “tax mitigation and professional sophistication” is utter, not utter, but utterly and complete bollocks.
Taking this ‘top rate’ of personal taxation as an example, tell me please, apart from the rampantly delusional commentators that taxation ‘is a state organised violation’ on their individuality (like they are nothing more than what they can hold in their hands and how what the hold in their hands can be thrown at everyone else can actually mean something more socially advancing than the next individual), SURELY it’s a non-starter to believe that ‘success’ and ‘growth’ derives from ‘greed’. Which is all this means.
I live in Guernsey. I spent more than a decade administrating high net worth individuals to ‘maximise’ their wealth, funding their stupid, thoughtless lives, exactly to the point where it all went wrong.
I saw how the fickle Russian oligarchs, the tawdry property “tycoons”, the plainly evil owners of developing world resources; I unknowingly adminstered some of the transactions that brought down the Icelandic fraud, pissing about with billions and billions of what they clearly thought was inconsequential, what they clearly thought was theirs to do what they like with.
The same people that are bleating on about how they need to be treated nicely in order to to make sure I get a hospital bed when I’m sick through stress from achieving some random target that they demand from an institution that serves their end.
The people that complain that taxation – the very tool that enables wealth creation; through social stability, through a common expectation of progress, through the human desire for common social adequacy – should be despised until they come up with a better idea how to ‘maximise’ Humanity.
There isn’t, until those simpletons that control the wealth start investing in Humanity.
It really isn’t enough to spout statistical nonsense about this and that coeficient. We’ve moved on from those dark, comparative times.
Haven’t we?
Splendid and right.
The article points out he has not made good moves of late and has lost boat loads of cash.
Maybe this is just another bad move?