Market News

A wealth tax by Rachel Reeves would trigger a wave of millionaires living in Britain to flee to the US as they seek to escape punishing levies, new research shows.

More than 1,000 UK millionaires polled by Arton Capital said the US was their most preferred destination. Wealthy Britons will prioritise English-speaking countries and nations with favourable tax rates if the Government introduces a wealth tax.

Growing interest in the US as a new home for British millionaires comes after Donald Trump cut taxes for America’s wealthiest residents, and doubled the estate and gift tax exemption from $5.5m (£4m) to $11.2m per person, in a boost to the country’s high-net-worth families.

More than half of millionaires (53pc) polled were considering moving abroad if a wealth tax was introduced, while 60pc believed they could have a better quality of life outside the UK.

Canada, Australia and the UAE were also found to be popular locations for relocation according to the research from Arton, which advises wealthy individuals on global citizenship programmes.

The findings come amid concerns that a new levy on assets over £10m would drive people overseas and trigger a fresh exodus of the rich from Britain.

Several Left-wing Labour figures, including Lord Kinnock, the former party leader, have repeatedly called for the introduction of a wealth tax.

Last month Jonathan Reynolds, the Business Secretary, dismissed the idea as “daft” and urged backbenchers to “be serious”.

Mounting pressure on the Chancellor to introduce a new levy on Britain’s wealthiest comes as Ms Reeves faces a black hole of as much as £50bn in the public finances.

Armand Arton, the chief executive of Arton Capital, said fears from Briton’s wealthiest about a potential wealth tax showed the UK was at a “tipping point”.

He said: “The uncertainty around the Government’s proposed wealth tax mirrors the ongoing economic uncertainty seen around the world – from Trump’s tariffs to conflict in the Middle East.”

The research also revealed that 82pc of millionaires resident in the UK would consider investing in a golden visa or citizenship by investment programme, which allows individuals to gain residency or citizenship through financial investment. Arton offers a consultancy service to millionaires seeking out such programmes.

Despite many millionaires weighing up a potential move abroad, 66pc of those surveyed said they still believed the UK was an attractive place to invest compared to other nations.

Concerns about a new wealth tax come as the Government faces scrutiny over its approach to Britain’s high-net-worth individuals and entrepreneurs.

Many wealthy residents are already moving abroad after Ms Reeves scrapped non-dom tax status and introduced inheritance tax on overseas trusts earlier this year.

Since the rule change there have been a series of high-profile departures, including Richard Gnodde, Goldman Sachs’s vice chairman, who said he was relocating to Milan to avoid being hit by the scrapping of the non-dom status.

The Office for Budget Responsibility said in January the abolition of the tax status would result in 25pc of non-doms with trusts leaving the UK, while 10pc of those without trusts would move overseas.

Mr Arton said: “There are many repercussions of the introduction of a levy, but one thing is clear: the longer that unpredictability persists, the greater the risk of losing capital, talent and long-term investment to countries that offer greater security for individuals, families and their futures.”