The Financial Times, The Guardian and City AM quote Sophie Dworetzsky and Dominic Lawrance on Labour’s proposed tax crackdown on non-doms
Labour pledges to raise £2.6 billion a year over the course of the next parliament by closing “loopholes” in the government’s plans to abolish exemptions for people who are not domiciled in the UK for tax purposes.
See below for thoughts from our Private Client team:
Sophie Dworetzsky, Partner, says:
Labour's intentions to modify the tax treatment of non doms even further than already announced by Jeremy Hunt a few short weeks ago, are disappointing.
"Specifically, the ability to settle trusts and protect assets from IHT is in their sights, as is a transitional measure to allow offshore income to be taxed more favourably for a two-year period.
"These measures feel like trying to squeeze out every last drop until there's nothing left. The UK operates in an environment of tax competition, and if the UK makes itself yet more unattractive from a tax point of view, we could lose out to other countries, such as Italy, which have more favourable tax regimes. One can but hope this is realised before any legislation is implemented.
Dominic Lawrance, Partner, adds:
The proposed IHT changes are already causing alarm to wealthy internationally mobile individuals. We have already seen some individuals making plans to leave the UK, and the latest Labour announcements will undoubtedly result in further people being spooked.
"Both main parties should commit to undertaking a genuine consultation process, and listening to tax professionals with a wide range of perspectives, before embarking on reform of the territorial limits of IHT.
"Any reform needs to be undertaken with real care, so that it does not drive away internationally mobile individuals and the investment that they have the potential to bring to the country.
Related coverage:
IFA Magazine , Spear's, City AM, Financial Times , The Guardian, Wealth Briefing
