Rachel Reeves rules out departure tax for wealthy people leaving UK

Unlock Editor's Digest for free

FT editor-in-chief Roula Khalaf picks her favorite articles from this week's newsletter.

Rachel Reeves has ruled out imposing an exit tax on wealthy people leaving the UK to avoid higher taxes in this month's Budget as businesses brace for a rise in levies on capital gains.

The Prime Minister has recently been urged to introduce a tax on people who avoid UK capital gains tax and move abroad and then sell their assets as he seeks to raise more money from the rich to plug a financial hole worth at least $22 billion. . finances.

Countries including the United States, Canada and Australia have already imposed similar taxes, weakening the incentive for the wealthy to emigrate for tax purposes, but British government insiders briefed on the prime minister's thinking said Reeves would not follow suit. There will be no departure tax, one person said.

The decision comes as Reeves is considering raising billions of pounds by raising capital gains tax. Most of it is paid by the country's wealthiest people.

Reeves also wants to raise money from nondomes and private equity heads, but has had to scale back his plans. A Treasury analysis warned that the big changes could drive people abroad and impose financial costs.

One FTSE 100 group executive said that while the Labor government was very city-friendly, CGT was the only region where the government did not listen to business. Ministers seemed to have a blind spot and thought that if tax rates were raised, people would stop leaving the UK, the administration said.

The issue is very sensitive to Sir Keir Starmer's government. On Monday, the Prime Minister will host a summit of 250 leading global investors in London to persuade them to invest in the UK.

Reeves has not ruled out an increase in CGT since becoming chancellor in July, while Starmer said in August that those with the broadest shoulders should bear a heavier burden.

The Treasury declined to comment on tax speculation ahead of the budget.

Research from the Center for Tax Analysis this week found that a variety of UK countries, including Australia, Canada, the US, France, Germany and Japan, levy some form of exit tax.

CenTax said the UK should follow suit. The study found that British nationals leaving the country have more than $5 billion in corporate shareholdings, which translates into at least $500 million a year in lost capital gains tax revenue.

The Institute for Fiscal Studies suggested this week that one option would be to tax immigrants from the UK on profits made, asset appreciation and unsold investments.

Finance ministers have previously been warned that raising CGT rates too high could end up costing the Treasury revenue.

UK tax authority HMRC previously calculated that a 10 percentage point increase in the rate of capital gains tax paid by higher or additional rate taxpayers across a range of assets would lead to a loss to the exchequer of around $2 billion a year. They will change their behavior and retain their assets.

However, the IFS warned that these estimates may not be a good guide to the long-term impact of CGT reform and that funding could be more likely.

In the UK, profits from business assets, shares and real estate other than your primary home are subject to CGT of 10-24%. The highest percentage, 28%, represents a cut of the profits earned by private equity representatives on successful deals.

According to a Conservative Party official, former Conservative Prime Minister Jeremy Hunt received advice from the Treasury this year that he could maximize treasury revenue by lowering the CGT rate paid by high and additional rate taxpayers on property sales to 24%.

Edward Troup, former chairman of HM Revenue & Customs, said the stock or art market was very different from the property market, adding: If Rachel Reeves is reasonable, opt for a single rate in the mid-$20s per person. cent range.

HMRC estimates that a 1 percentage point increase in CGT rates in April 2025 would increase tax by an additional $110 million in 2027-28. Meanwhile, if the CGT increase rate is increased by 5 percentage points, a loss of 140 million won will occur in 2027-28, and if the CGT increase rate is increased by 10 percentage points, a loss of 2 billion won will be incurred in 2027-28.

Business owners are concerned not only about CGT rates but also about the possibility of business relief being abolished or reduced. The tax relief allows individuals or business assets, including stock in a target public company, to be passed on from one generation to the next, and inheritance tax is generally levied at a rate 40% higher than estate tax. The threshold is 325,000.

Sources 1/ https://Google.com/ 2/ https://www.ft.com/content/6a52e390-9754-4044-b349-da101206731e The mention sources can contact us to remove/changing this article

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos