As the FT has noted this morning:
Fears of a massive non-dom exodus from the UK have been allayed by initial tax data, which suggests that total numbers leaving the country are in line with — or even below — official forecasts.
They added:
HM Revenue & Customs payroll data has found no evidence to suggest more non-doms left Britain in response to Rachel Reeves' 2024 Budget than official predictions, according to people briefed on the findings.
To contextualise this, they noted:
Reeves was told by the Office for Budget Responsibility to expect 25 per cent of non-doms with trusts to quit the country in response to the crackdown on their tax status.
HMRC data now suggests this prediction is broadly correct.
Three things seem worth noting.
First, the fickle who were always transient and who were only ever here to avoid paying tax, and who did as a consequence add nothing of any value to the UK, have gone. So what? No one should be worrying about that. These are the last people on whom anyone, including Rachael Reeves, should want to build our society because they have already indicated that they have no faith in society and do not wish to contribute to it.
Second, despite all the talk, the majority of the non-dom people have stayed, whilst the number of domiciled people in the UK who will leave as a consequence of any tax changes is so small that it is not worth worrying about.
Third, it is time we ignored the hype created by tax advisors, investment managers, the financial media that feeds off those people, and the strings of hangers-on whom they attract who spread the myth that we are dependent on the wealth of people who do not add value to the UK economy.
As I have argued in my series on wealth, the simple fact is that the wealthy do not want to move very much more than anyone else does, because (and this is a shock to some people) they are human beings who hate change, have families, like where they live, like their lifestyles, do not want to disrupt their entire social circle, and have reasons to stay put where they are.
For all the talk that tax is the only thing that matters to the wealthy, in reality, this is simply not true. They may not like taxes, but they accept the obligation to pay them. The only people who are foolish enough to believe that they will actually leave are the politicians who succumb to the lobbying of the tax industry, and not the wealthy themselves.
We can, in reality, tax the income and gains of the wealthy a great deal more and will see very little behavioural consequence with regard to relocation as a result. It is time that we based tax policy on this fact, because fact it is.
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Is it possible that now the wealthy may not come (since mere residence in the UK will make drag their worldwide assets into IHT)?
They might be planning to transfer their main non-UK home to their kids but will be unable to do so if they reside in the UK.
Who cares? Why do we want these fickle people who do not want to contribute to this society? What is the benefit of having them? Have you watched my series on wealth?
Americans seem to be coming in larger numbers than ever, fleeing T***p, and who can blame them. The unfortunate consequence, though, is that it’s making houses in or around the Cotswolds, in particular, even further out of reach of the average working family.
My understanding is that there’s more than ample evidence from the US – where some states have far higher state and local taxes than others – that the level is taxation is only one of many (and not the most important by far) factors that people take into account when deciding where to live.
Indeed, closer to home, I know for a fact, that in and around Nottingham – where council tax rates between local authorities vary considerably – I’ve never once in all the years I’ve lived in various parts of Nottingham and greater Nottingham (i.e. since 1979) heard anybody say they chose a property in one district rather than another due to council tax being higher/lower. There are just far to may other, much more important factors, worth taking into account.
Businesses usually admit tax comes in at about number 5 in their business location decision making – and it is a low five at that.
Britain is a great country to live in if you are rich. It’s stable, has a functional rule of law (for those able to pay), good transport links, and a globally used language. I would say that the language is a major factor, with English being a dominant second language globally. I also wonder how appealing this country will be to those who would have gone to the US, which is quickly becoming a place where only those willing to bend the knee to the Orange Overlord can do business. It doesn’t look good if a CEO has to plead his case to keep his job, and then pay a tithe as compensation.
Anecdotally, I came across a US exile last week in McDonald’s. He and his wife had moved here for a teaching job, as teaching positions in the States are becoming hard to find and increasingly politicized. Strange times.
As result of current Regime, if i had £2m in the bank i would be off like a shot, everyone i have spoke to says the same. Cannot live under what is becoming a Communist dictatorship. As for Yanks coming this way, they are exactly the ones the country does not need.
I post this as an example of some of the idiotic comments that turn up here, quite regularly. To describe you as small-minded Colin (although I much doubt that is your real name) is to be very generous to you.
I notice that Gary Stevenson who is promoting reducing wealth inequality, has been interviewed by Paloma Faith.
https://www.youtube.com/watch?v=l-o5RL3xtFg
It’s probably quite astute, reaching a demographic that you might think has no interest in economics.
That is good if he talks about what is really needed. My concern is that he might not. I am getting increasingly worried by his narrative.
I enjoyed the interview as it was informal, not focussed on primarily on economics, and revealed some different aspects of both people. I enjoyed his anecdote about an older Japanese man speaking to him about karaoke, and how this changed his view if this.
I saw a clip today from TalkTV in which the presenter tore up a copy of this edition of the FT. He was VERY angry (well, seemingly), ranting something like ‘do you call this proper journalism?’ etc. Very performative, or genuine and triggered by some facts that challenged his cherished ideology.