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February 2, 2010 2:34 pm
The UK could face a large scale exodus in the coming year as wealthy individuals search for ways around the planned rise in the top income tax rate to 50 per cent in April, according to a poll by international law firm Withers.
Three quarters of the respondents, made up of wealthy individuals including bankers, accountants, independent financial advisers and head-hunters, said they were likely or somewhat likely to move abroad in the next 12 months. On top of this, almost 70 per cent said they would move both their family and their business abroad.
The survey of 116 individuals was undertaken at a seminar hosted by Withers late last month on the comparative tax and lifestyle advantages of staying in the UK or moving abroad.
Switzerland remains by far the most popular destination amongst those thinking of leaving with nearly 63 per cent of respondents citing it as a possible location.
The Channel Islands came second, with 13.79 per cent considering relocating there.
Other jurisdictions named included the USA, Hong Kong, Monaco, Singapore, France and UAE.
Lifestyle was highlighted as the most important factor behind the decision to relocate and personal tax the least important. Political uncertainty and the bank payroll tax were also cited as factors.
The survey cited the UK as no longer being an attractive place for non-doms ahead of the tax rise, set for April, coupled with new rules limiting the tax relief on pensions to £30,000 and scrapping personal allowances for UK residents earning more than £100,000.
Perhaps surprisingly a change of government was not considered an important enough factor to make people reconsider their decision to move. 68 per cent of respondents said that should the Conservatives win the next election, they would still consider moving.
Chris Groves, a partner in the wealth planning team at Withers, said: “Whilst the poll was never intended to be scientific, it gives a clear indication of the intentions and concerns of Britain’s high earners. The combination of higher taxes and uncertainty over the government’s future intentions means that the country is in danger of losing its top wealth creators and earners.
“Clarity on any future reforms of the tax system would be welcome as uncertainty was, on average, rated by our survey respondents as a more important factor than the personal tax rates themselves in making people consider relocating.”
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