The UK is often viewed as a tax haven, due in part to the low rate of corporation tax (20% from 1 April 2015) borne out by the fall in receipts from UK business over recent years. One would therefore expect overseas entrepreneurs to be rushing to the UK to take advantage.
However, what is good for the goose is not always good for the gander. If proposed changes go ahead, those already here could be suffering a £40k hike in the annual charge for long term resident non-UK domiciliaries, whereas those yet to arrive can expect to pay capital gains tax on UK residential property investments for the first time from 6 April 2015. Both will also be caught by the 5% rise in stamp duty land tax in high end properties from 7% to 12%.
“If the UK is serious about attracting foreign investment it must send positive messages not only to businesses, but also business owners”, comments Vince Wood
, tax partner at Moore Stephens.
“The government is no doubt betting that the UK’s very attractive corporate tax environment, coupled with the many other attractions of moving to the UK, are more than enough to offset these personal tax rises. For most of the wealthy entrepreneurs behind successful businesses, that calculation may well be right. However, there must be an upper limit to tax increases, beyond which entrepreneurs will not only stay away, but start moving away as well. It remains to be seen whether, with these latest rises, the UK is now reaching that limit.”
Private Client Tax team
Business Tax team
Private client tax