The British government closed this loophole because it's politically easier than the strategy which is actually needed: properly taxing assets.
This is much harder to evade - if you own most of Mayfair, you can't just move your assets elsewhere - they are very clearly tied to the location.
Of course, this would mean taxing powerful aristocrats, including the royal family.
With their large majority, the British government had the opportunity to do this, but decided to take an easier path. The reason why this path was easier is now becoming clear to them.
As you pay more tax, you get less services, and I dont just mean, where you elect to avoid them. You get less (or none at this point) free childcare. No umemployment benefits if you get fired. No child benefit. You can't save as much in your pension.
Then there are the semi-elective things like healthcare, education, home security. These kinda dont work for the whole society. The rich are thus paying for their own out of pocket. But they are also paying for the semi-working system for everyone else.
I think introducing a wealth tax just to balance the books without rethinking who and how accesses public funds, will just end with the rich leaving. Some may say good riddance, but the UK budget is now beyond creaking and heading for collapse.
Oh and when I say "the rich", that probably covers many people here. IIRC earning 90k per year puts you in the top 1%. A 10-15 year experience NHS doctor is in that bracket.
People earning 90k aren’t “the rich” that are doing the most egregious tax avoidance. They’re still working class. They still have to work or face destitution.
The very top sliver who own the majority of the land and assets and who never need to work a day in their life are who must be looked at; that hereditary wealth needs to begin to find itself flowing into public services more and more.
The rich benefit most from a stable society and the rule of law though.
No point owning most of Mayfair if you don't feel safe enough to enjoy your lifestyle.
And it's not just funding the police and courts that leads to this - it's making sure there aren't too many desperate people with no hope. ie paying unemployment benefit so people can live while looking for work - is all part of that stable society from which everyone benefits - but particularly the rich as they have more to lose.
The rich generally derive their wealth from the labours of a healthy and educated population. In most Western countries, these are proceeded at least in part paid by taxes and amount to a massive subsidy to those who need labour. Arguably this includes the "free childcare" mentioned above.
This is a lie. In US, most food our rules, legal system, government agencies (that are not direct transfers like doc security & Medicare) exist to protect properties and interest of the rich.
That higher income people are not seeing much of direct transfers does not mean they are not getting more benefits from the government. Even our bloated military and foreign policy is primarily still protecting US business interests globally. It’s not minimum wage peon that benefits from that. It’s owners of large capital
Yes. Progressive taxation. That's the point. Tax those who can afford it, fund equal opportunity and a basic standard of living for those who can't. Pull society up from the bottom.
As much as one can complain about specific inefficiencies or not being able to send young Jasper and Tabitha to private school because of VAT and tapered tax relief, I do think we don't take it far enough.
The reason it not working is that we have stapled our personal wealth and economy to housing. 60 years of financiers pushing for higher lending limits with looser regulation resulted in more people able to "afford" a £1m house. That drags up all the prices.
There's no simple way to reverse it this distortion but it had a knock on effect: the generationally rich, the landed gentry through to farmers have become insanely rich, through no work but HODLling all the land until they got planning permission.
I agree, wealth tax is scary but not addressing how wealth works won't fix things either.
The royal family is exempt from a lot of tax laws.
There was a bit of a scandal a few years back at just how much input the Queen got to those sort of laws, but it didn't really have legs as everyone thought she was brilliant.
But if the same thing comes out about King Charles you can bet it's going to be a bigger stink.
Genuine question as I’ve been interested in the conversation around taxing wealth: how do we do it?
I assume a new government dept. has to be set up to oversee it. Or do the wealthy self assess? Are things like shares and investments valued once? Once per year? How is a company valued? How do you know if you qualify as wealthy? Do we value everyone’s wealth? Can’t the wealthy just relocate or move assets out of reach?
I don’t expect answers to this, I’m just thinking out loud as there seem to be a lot of challenges.
A few countries seem to have tried and continued to tax wealth but it seems far from proven and only seems to “work” in Switzerland, which is a bit of an outlier
Switzerland does it and my understand is they basically just ask you to fill in a tax return every year and say how much wealth you have (all the assets you own).
Presumably they do have a department of people checking this to make sure people aren't lying, but also Switzerland is a relatively high trust society, and taxes are reasonable, so people probably don't mind paying too much.
In the UK in 2025 I'm not sure this would work, people would try and evade it and the UK government isn't competent enough to stop them
I think by "asset" OP actually means "real property", otherwise the subsequent statement of "if you own most of Mayfair, you can't just move your assets elsewhere - they are very clearly tied to the location" doesn't really make sense. You could easily move corporations around, for instance, so the statement is only really true when applied to real estate.
My answer to this (good) question is: do whatever banks do to value illiquid assets when they lend against them (this is how the wealthy largely have cash at all), then levy taxes accordingly. Hell if you want, add the taxes to the interest rate.
You don’t need new govt. dept. tax authority is enough. You do your yearly tax statement.
In NL they have access to your bank accounts or more like banks and brokers are obliged to provide state of accounts as per 1st of January.
Downside is you pay wealth tax on „possible gains” not actual gains on wealth above 40k€. If you have mortgage it of course is deducted from value of your house or any debts that you have documented.
In case you think collecting watches can make you hide the wealth, there are of course tax authority checks most likely if your wealth suddenly changes.
I don’t think the wealth taxes, fundamentally workable because you have issues you raised above, but other things like liquidity and indivisibility of assets.
I think the simpler solution if simply passing along the original cost basis to heirs (and without documentation it’s assumed to be zero). That way people or even families can defer taxes on income, but eventually they get paid.
That Socialist hotspot, Texas, taxes property at 1.8%, vs. 0% in the UK. Can't inconvenience the feudal aristocracy (i.e. parasites descended from thugs), starting with Chuck von Battenberg, Sachsen, Coburg und Gotha.
There's been a big shift of rich people avoiding taking pay or dividends. Instead they get paid in stock, and then get interest free loans secured on that stock to actually spend money.
It's a loophole the mega-rich are using to avoid tax.
The other thing that's happened is that a lot of the mega-rich have lobbied to gradually chip away at inheritance taxes. So again they just pass the asset, paying a fraction of the taxes they'd have paid had they been a "normal" tax payer.
And one of the big things they've got? No capital gains on those stocks when passed to children.
So yeah, we need to tax assets as well as income. Because anything that's not taxed the rich just funnel money into it to avoid paying tax.
It's not a revolutionary idea. That I know of, the Netherlands does it, somewhat. How it works is: rather than taxing capital gains, with its myriad loopholes and counterloopholes, you tax assets directly: assume a neutral sort of "risk-free" rate of return, and then tax a percentage of that. E.g. assume yearly return of 1% on cash and savings, 6% on other assets, etc, then levy tax of 30% on that (past a tax-free allowance of 25k€ per person).
The real solution to the UK’s stagnation is accepting the truly politically difficult truth - the UK is getting poorer, year after year. The empire is long dead and gone, and their number 1 growth company and success story of the last decade is OnlyFans, a global smut purveyor.
The UK needs to radically reduce its social safety net and simultaneously cut taxes, at least for new companies and small businesses. The only way out is real, sustained, long term growth and innovation. Stealing ever more of a shrinking pie is already running out of steam.
Privatisation and attacking social security does not work, it just makes the wealthy even wealthier.
Not the solution is fair taxation every trade made in the country, if you make business in a country you need pay taxes there for the transactiona made there.
Otherwise you just extract value out of the country, without giving back.
To me there is no worse thievery than tax evasion, it's literally robing a nation.
> The UK needs to radically reduce its social safety net and simultaneously cut taxes, at least for new companies and small businesses. The only way out is real, sustained, long term growth and innovation. Stealing ever more of a shrinking pie is already running out of steam.
I was under the impression they had done that already.
Though one can't help but think it wont be radical enough for conservatives until we simply dispose of those unable to work through some dystopic mechanism or other.
Oh wow I had no idea OnlyFans is from UK. Always thought it was US.
>The UK needs to radically reduce its social safety net and simultaneously cut taxes
Unfortunately that is not a popular opinion in the UK. They want to tax everything, taxing the rich is popular among voters which is why they are doing it. And again the consequence have long been known or told. They are doing it anyway.
Most of the street in London is empty. UK is either number 1 or number 2 in millionaires fleeing the country after China. Property pricing are falling somewhat not because of more supply but because those asset are being sold as part of those moving abroad.
Does London need the Global Rich hanging around if they’re not willing to pay taxes? Is it necessary to have the tax bring in 30 Billion in order for it to be considered a success?
If nothing else, this tax demonstrates to those who DO pay tax, that the Government is willing to treat earners equally and fairly, regardless of how much tax it brings in.
They do pay taxes though. Non domiciled are roughly 0.11% of UK residents and pay about 1.24% of UK taxes. This change is likely to lower tax revenues.
> Non domiciled are roughly 0.11% of UK residents and pay about 1.24% of UK taxes
It's curious that the percentages used to defend not taxing the rich (whether they are UK citizens, or operating as "non-doms") tend to be what percentage of the tax burden they pay. But it's never what percentage of their income and capital gains they pay as tax.
I think the latter is a fairer representation, considering we have a progressive taxation system. Someone who is earning over £125k a year should be paying close to 45% of their income and capital gains.
So what you are saying is, it eventually trickles down?
edit: The reality is they don't spend enough for it to offset the harms that wealth inequality brings.
I know a couple of people who have been using this London loophole as a way to avoid paying taxes anywhere at all. They are not residents here, they are not residents there, and their income is earnt globally. So they think they shouldn't have to pay tax to any particular country.
Are they? Or are they there to outcompete ordinary people for houses, labour, etc?
We don't need a bigger market for luxury dog sitters or sports car manufacturing, better allocate those resources for childcare, elder care, or other chronically understaffed fields.
There are plenty of people with money, who do pay taxes, who can start those businesses. We don’t need trickle down economics in order to function as a society.
"slightly more indirectly" is an interesting way to say "by distorting local economies and politics around the idiosyncratic needs and desires of a very small number of uber-wealthy foreigners."
The irony of a superrich claiming to feel 'unwelcome' in a country while claiming non-domiciled status in it cannot be lost on the author. Also, for all the talk of scaring away "job creators" I doubt the guy running a "Dubai-based venture capital firm" was creating many jobs in the UK.
The number of non-doms fell from 74,100 to 73,700 in the year up to April 2024, whilst tax intake from them increased by £100m. I do not consider 400 out of 74,100 as them fleeing....
[1]: Non-dom tax take jumped £100mn in 2023-24 despite falling numbers - https://on.ft.com/3Gx1MXU via @FT
Why does it have to be assumed that having the ultra wealthy living in your country and not paying taxes is a net positive? It seems close minded to just ignore the possibility that those people are causing more harm than good.
I think the consensus view is that they are massive net positive contributors (they still pay a lot in taxes in terms of things stamp duty or VAT, they spend lots of money in the country supporting business and employing people, and they don’t consume much in the way of resources like using the NHS or publicly funded schools).
I think the optics are clearly bad but the question I think people really have to ask is what they rather these people paying something in the country, or nothing at all (because there’s nothing keeping them there if it’s viewed as too expensive to stay)
It's not an assumption. The article stated that non domiciled residents DO pay a lot of taxes. That's why the UK is concerned that they are leaving and modelled against that risk.
I did a quick check and it seems like non dom's are about 0.11% of UK residents and pay about 1.24% of UK taxes. And this doesn't account for indirect benefits such as taxes paid on wages they generate.
if i understood the article, these people (1) didn’t make their money in your country, and (2) are not making money in your country. they just happen to reside there. it seems nonsensical to me to tax revenue that was made in foreign land. but people who love and swear by taxes think that more tax revenue can solve world hunger.
if the uk wants tax money on revenue maybe they should incentivize these so-called super-rich to run their affairs from within the uk?
I’d presume they are spending a lot of money locally and probably employing a staff locally and driving other economic activity locally but I guess I could be wrong.
This might be persuasive if the reports didn't indicate that substantially more non-doms are leaving the UK than expected. The options are not a binary UK or Andorra.
> a centuries-old tax loophole, abolished in April, that catered to the global rich. The nondomiciled—or non-dom status, as it is known—allowed foreigners living in the U.K. to pay tax only on what they earned domestically. Profits made abroad were ignored unless brought into the U.K.
I don't understand. Why is this a loophole? Why is money earned abroad and kept abroad taxable not by a foreign government but by the UK government?
In the US you pay taxes in the state where you earn the income and where you live. So for example if you own a pass-though tax corporation and it earns income in all states then you must file and pay taxes in all states.
It’s standard in Europe and many other countries to tax their “tax residents” on their worldwide income. The tricky part is that sometimes that external income is also taxed at source, but this is usually taken care of by tax treaties, which means that you pay the higher of the tax rates, but only once.
Because it allows people to very easily funnel their income through offshore companies, and avoid being taxed on it because it’s “earned” in Cyprus or Cayman Islands.
_good_. the average person is struggling to feed and shelter themselves and we’re worried that if we don’t coddle the rich the economy will collapse. let them leave and we can rebuild a society that supports everyone.
Wrong, our society is here to support pensioners (one fifth of the population) and those on disability benefits (one quarter of the working age population). Every millionaire that leaves, leaves a disproportionate hole in the amount of tax collected and we borrow more to cover the gap. This will continue until the IMF is forced to step in.
Are these people really "investors and entrepreneurs" in the UK economy if they were staying there specifically as a tax dodge, when any profits from UK economic activity would always have been taxed?
Is this a bad thing? You'd only leave if you weren't contributing to the local economy. People who, for example, run a small business in the UK aren't impacted at all.
How is a rich person living in London not contributing to the economy? They don't actually make their money in United kingdom, they just import it to live near good Indian food, fish and chips, and the theater. Theatre.
If you accept the premise that these individuals are net contributors (paying far more in taxes than they consume in services), and that their income and assets are largely non-UK and mobile, then the reality is simple: you either compete for them and treat them differently, or you lose them to jurisdictions that will.
If I bring in $2 billion in cash to a 100 person town in the US, with a median income of $40k: I can hire none, some, or all of them for $40k to $60k; and make the cost of living too expensive by buying up most of the land, to the point that the remaining stock will cost double or triple the cost.
This is the majority of the oligarch class (Russia, China, Middle East, private equity) who’ve streamed into the democratic West and is an absolute net negative.
Then you have billionaires like
Musk (politics aside) who aren’t parking their wealth but building new industries; and the cost of living goes up because of the wages and perhaps demand, as more workers stream in (net positive).
Then you have the rest of the billionaires (high finance, Amazon) whose method is wealth extraction through consolidation and off-shore labor (arguably net negative).
That's the thing I never understand about tax the rich, as soon as you do that they're going to leave. Well even before you do that they're going to leave. And a lot of these people do employ a lot of people so they just start companies elsewhere.
And even if you took let's say 95% of their wealth that wouldn't even pay down half of the US debt.
I think all this stuff ends up doing is being a brain drain to make people leave whatever country they're in for other countries
> And a lot of these people do employ a lot of people so they just start companies elsewhere.
Great, do that! Go start companies in other countries, and trickle down their wealth to employees in the form of wages and salaries.
If only they thought of doing that in the UK! Instead of the rich buying up properties turning them into buy-to-lets, both pricing out working people of their first home, and then taking their income as rent.
Well the USA isn't following it so it's dead. But also, there were loopholes making it meaningless. For example, here in Switzerland the government said they'd follow it but local governments could provide rebates to companies.
And why not? We don't need the extra revenue. Why should we raise taxes on local companies when we don't want the money? Just because other countries can't control their spending why do we have to raise our taxes? It's stupid.
Also, smarter policy would be like what Estonia does
- CIT should only be applicable when dividends are paid. So corporations can reinvest that money in the business and not be taxed on it.
- PIT on dividend income should be 0, since that amount has already been taxed(CIT) and the stock holder has paid his due share on that income as a owner of corporation.
What if you target 0% inflation and instead tax assets at 2%? Same effect as “good inflation”, encouraging investment rather than hoarding, but it funds government rather than just devaluing the currency?
Workers have an irrational dislike of their salary or wages ever going down. The main benefit to 2% per year inflation is giving employers a way to reduce real wages 2% per year during a downturn without the worker noticing.
Most comments on this thread go the way of: “You’ll own nothing and you’ll be happy.”
When is enough going to be enough? Using the example of this article, the UK. There was a 70% increase in government spending during the last 10 years. Do you think that you are getting 70% better public services?
Where is the government spending all our money? And what kind of propaganda is going on to make the people believe the answer is even more taxes?
I wonder what people actually think of this result. "tax-the-rich" makes very limited sense unless applied internationally. Many of the super rich are super rich because they have serious influence over, or outright control of foreign states (US rich are a large exception worldwide). Nobody in the US is even 1% as rich as Putin, or Xi, or frankly even just as rich as the grand duke of Luxembourg is.
You cannot tax these people directly, because they'll leave.
You cannot have international cooperation on tax treaties because these people control states.
In other words: you can only tax them either through war, or by totally blowing up trade relationships.
One of these rich persons you mentioned is very unlikely to decide he's going to leave Moska-Oblast and retire in Monaco or anywhere else that's doesn't have a thick bunker at the ready for him.
"hey guys between income tax, and VAT and other goods taxes we literally take more than 50% of the money that the entire lower and middle class is earning! This should be more than enough by a factor of two at the least to run our shitty bureaucracy and public services"
Nope it's always
"Who can we tax more? How to we steal more money for our shitty novelty projects and ideological madness"
Anyone resource strong enough to leave, that usually is the upper class, will eventually do so. Leaving even more predatory taxation pressure against the lower social strata
> The exemption was restricted over time to largely benefit foreigners who don’t expect to live in the U.K. permanently.
Sounds like it worked out as planned, since they're leaving now.
Plus, 40% inheritance tax is crazy. You'd have to sell off half of what you inherit to pay the tax. Sucks if you're a farmer or a multigenerational family business
Farmers with active farms have not been paying inheritance tax and won't until 2026, and even then there are ways to avoid most of it (couples can pass on £3 million without tax for example). See https://www.gov.uk/government/news/what-are-the-changes-to-a...
The other side of the coin is that inheritance is allowed at all. We could tax at 100% above a certain threshold, wealth only exists because it is permitted through the recognition of property rights. 40% is arguably more than reasonable when you’re desiring to transfer generational power the beneficiary did not earn, but simply was lucky to be in the right lineage. It is a lottery ticket.
The 40% only applies to the portion of the estate that exceeds the tax-free threshold, which is currently £325K. If you leave your home to your children or grandchildren, that can be raised to £500K, and if you leave it to your spouse, it increases to £650K.
There are also ways to reduce the tax rate, like through charitable donations.
Like in the US with estate taxes, relatively few people are affected by it.
It's 40% above a threshold; the trouble is that the threshold is laughably tiny when you compare it to house prices.
It's also relatively easily defeated by transferring assets to others well in advance of your death, which is the kind of thing very wealthy people are more likely to be able to arrange.
Why would I care if someone inherits billions of dollars. I'm going to go on enjoying my life, rather than wasting it being upset someone else has more than me.
I’m not even “rich” and yet thinking of moving myself and my assets somewhere else like Dubai. Why should I pay into a system I get virtually nothing out of? Furthermore my country took my freedom of movement in the EU away. That’s another incentive for me to leave - five years in Portugal and I get freedom of movement back.
https://archive.md/8ndug
The British government closed this loophole because it's politically easier than the strategy which is actually needed: properly taxing assets.
This is much harder to evade - if you own most of Mayfair, you can't just move your assets elsewhere - they are very clearly tied to the location.
Of course, this would mean taxing powerful aristocrats, including the royal family. With their large majority, the British government had the opportunity to do this, but decided to take an easier path. The reason why this path was easier is now becoming clear to them.
As you pay more tax, you get less services, and I dont just mean, where you elect to avoid them. You get less (or none at this point) free childcare. No umemployment benefits if you get fired. No child benefit. You can't save as much in your pension.
Then there are the semi-elective things like healthcare, education, home security. These kinda dont work for the whole society. The rich are thus paying for their own out of pocket. But they are also paying for the semi-working system for everyone else.
I think introducing a wealth tax just to balance the books without rethinking who and how accesses public funds, will just end with the rich leaving. Some may say good riddance, but the UK budget is now beyond creaking and heading for collapse.
Oh and when I say "the rich", that probably covers many people here. IIRC earning 90k per year puts you in the top 1%. A 10-15 year experience NHS doctor is in that bracket.
People earning 90k aren’t “the rich” that are doing the most egregious tax avoidance. They’re still working class. They still have to work or face destitution.
The very top sliver who own the majority of the land and assets and who never need to work a day in their life are who must be looked at; that hereditary wealth needs to begin to find itself flowing into public services more and more.
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> IIRC earning 90k per year puts you in the top 1%.
According to the public data for 2023-2024, top 1% is around £180-200k, so you're off by quite a bit. £90k is around 5-6%. This is gross, not net.
In the U.S., the top 1% is around $570-600k according to 2024 census numbers.
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The rich benefit most from a stable society and the rule of law though.
No point owning most of Mayfair if you don't feel safe enough to enjoy your lifestyle.
And it's not just funding the police and courts that leads to this - it's making sure there aren't too many desperate people with no hope. ie paying unemployment benefit so people can live while looking for work - is all part of that stable society from which everyone benefits - but particularly the rich as they have more to lose.
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The rich generally derive their wealth from the labours of a healthy and educated population. In most Western countries, these are proceeded at least in part paid by taxes and amount to a massive subsidy to those who need labour. Arguably this includes the "free childcare" mentioned above.
“As you pay more tax, you get less services”
This is a lie. In US, most food our rules, legal system, government agencies (that are not direct transfers like doc security & Medicare) exist to protect properties and interest of the rich.
That higher income people are not seeing much of direct transfers does not mean they are not getting more benefits from the government. Even our bloated military and foreign policy is primarily still protecting US business interests globally. It’s not minimum wage peon that benefits from that. It’s owners of large capital
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Yes. Progressive taxation. That's the point. Tax those who can afford it, fund equal opportunity and a basic standard of living for those who can't. Pull society up from the bottom.
As much as one can complain about specific inefficiencies or not being able to send young Jasper and Tabitha to private school because of VAT and tapered tax relief, I do think we don't take it far enough.
The reason it not working is that we have stapled our personal wealth and economy to housing. 60 years of financiers pushing for higher lending limits with looser regulation resulted in more people able to "afford" a £1m house. That drags up all the prices.
There's no simple way to reverse it this distortion but it had a knock on effect: the generationally rich, the landed gentry through to farmers have become insanely rich, through no work but HODLling all the land until they got planning permission.
I agree, wealth tax is scary but not addressing how wealth works won't fix things either.
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The royal family is exempt from a lot of tax laws.
There was a bit of a scandal a few years back at just how much input the Queen got to those sort of laws, but it didn't really have legs as everyone thought she was brilliant.
But if the same thing comes out about King Charles you can bet it's going to be a bigger stink.
Genuine question as I’ve been interested in the conversation around taxing wealth: how do we do it?
I assume a new government dept. has to be set up to oversee it. Or do the wealthy self assess? Are things like shares and investments valued once? Once per year? How is a company valued? How do you know if you qualify as wealthy? Do we value everyone’s wealth? Can’t the wealthy just relocate or move assets out of reach?
I don’t expect answers to this, I’m just thinking out loud as there seem to be a lot of challenges.
A few countries seem to have tried and continued to tax wealth but it seems far from proven and only seems to “work” in Switzerland, which is a bit of an outlier
Switzerland does it and my understand is they basically just ask you to fill in a tax return every year and say how much wealth you have (all the assets you own).
Presumably they do have a department of people checking this to make sure people aren't lying, but also Switzerland is a relatively high trust society, and taxes are reasonable, so people probably don't mind paying too much.
In the UK in 2025 I'm not sure this would work, people would try and evade it and the UK government isn't competent enough to stop them
I think by "asset" OP actually means "real property", otherwise the subsequent statement of "if you own most of Mayfair, you can't just move your assets elsewhere - they are very clearly tied to the location" doesn't really make sense. You could easily move corporations around, for instance, so the statement is only really true when applied to real estate.
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My answer to this (good) question is: do whatever banks do to value illiquid assets when they lend against them (this is how the wealthy largely have cash at all), then levy taxes accordingly. Hell if you want, add the taxes to the interest rate.
I think The Netherlands has it running quite OK.
You don’t need new govt. dept. tax authority is enough. You do your yearly tax statement.
In NL they have access to your bank accounts or more like banks and brokers are obliged to provide state of accounts as per 1st of January.
Downside is you pay wealth tax on „possible gains” not actual gains on wealth above 40k€. If you have mortgage it of course is deducted from value of your house or any debts that you have documented.
In case you think collecting watches can make you hide the wealth, there are of course tax authority checks most likely if your wealth suddenly changes.
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Just tax land and you'll get 80/20
I don’t think the wealth taxes, fundamentally workable because you have issues you raised above, but other things like liquidity and indivisibility of assets.
I think the simpler solution if simply passing along the original cost basis to heirs (and without documentation it’s assumed to be zero). That way people or even families can defer taxes on income, but eventually they get paid.
That Socialist hotspot, Texas, taxes property at 1.8%, vs. 0% in the UK. Can't inconvenience the feudal aristocracy (i.e. parasites descended from thugs), starting with Chuck von Battenberg, Sachsen, Coburg und Gotha.
The UK has council tax, which is quite similar to a property tax
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Yeah but they have No Income tax right?
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Wait are you suggesting that we tax assets instead of income?
There's been a big shift of rich people avoiding taking pay or dividends. Instead they get paid in stock, and then get interest free loans secured on that stock to actually spend money.
It's a loophole the mega-rich are using to avoid tax.
The other thing that's happened is that a lot of the mega-rich have lobbied to gradually chip away at inheritance taxes. So again they just pass the asset, paying a fraction of the taxes they'd have paid had they been a "normal" tax payer.
And one of the big things they've got? No capital gains on those stocks when passed to children.
So yeah, we need to tax assets as well as income. Because anything that's not taxed the rich just funnel money into it to avoid paying tax.
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It's not a revolutionary idea. That I know of, the Netherlands does it, somewhat. How it works is: rather than taxing capital gains, with its myriad loopholes and counterloopholes, you tax assets directly: assume a neutral sort of "risk-free" rate of return, and then tax a percentage of that. E.g. assume yearly return of 1% on cash and savings, 6% on other assets, etc, then levy tax of 30% on that (past a tax-free allowance of 25k€ per person).
Simple, and more effective!
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Yep - Cayman Islands, Isle of Man, Channel Islands, British Virgin Islands etc etc.
It's these that need to be tackled - not just because of tax evasion, but because they are also a large part of the workings of organised crime.
The real solution to the UK’s stagnation is accepting the truly politically difficult truth - the UK is getting poorer, year after year. The empire is long dead and gone, and their number 1 growth company and success story of the last decade is OnlyFans, a global smut purveyor.
The UK needs to radically reduce its social safety net and simultaneously cut taxes, at least for new companies and small businesses. The only way out is real, sustained, long term growth and innovation. Stealing ever more of a shrinking pie is already running out of steam.
Privatisation and attacking social security does not work, it just makes the wealthy even wealthier.
Not the solution is fair taxation every trade made in the country, if you make business in a country you need pay taxes there for the transactiona made there.
Otherwise you just extract value out of the country, without giving back.
To me there is no worse thievery than tax evasion, it's literally robing a nation.
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Why do so many people think that cutting social safety nets is a cheat code?
With the exception of certain pension benefits there isn't much money flowing into these programs to begin with.
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> The UK needs to radically reduce its social safety net and simultaneously cut taxes, at least for new companies and small businesses. The only way out is real, sustained, long term growth and innovation. Stealing ever more of a shrinking pie is already running out of steam.
I was under the impression they had done that already.
https://en.wikipedia.org/wiki/United_Kingdom_government_aust...
Though one can't help but think it wont be radical enough for conservatives until we simply dispose of those unable to work through some dystopic mechanism or other.
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Oh wow I had no idea OnlyFans is from UK. Always thought it was US.
>The UK needs to radically reduce its social safety net and simultaneously cut taxes
Unfortunately that is not a popular opinion in the UK. They want to tax everything, taxing the rich is popular among voters which is why they are doing it. And again the consequence have long been known or told. They are doing it anyway.
Most of the street in London is empty. UK is either number 1 or number 2 in millionaires fleeing the country after China. Property pricing are falling somewhat not because of more supply but because those asset are being sold as part of those moving abroad.
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Does London need the Global Rich hanging around if they’re not willing to pay taxes? Is it necessary to have the tax bring in 30 Billion in order for it to be considered a success? If nothing else, this tax demonstrates to those who DO pay tax, that the Government is willing to treat earners equally and fairly, regardless of how much tax it brings in.
They do pay taxes though. Non domiciled are roughly 0.11% of UK residents and pay about 1.24% of UK taxes. This change is likely to lower tax revenues.
> Non domiciled are roughly 0.11% of UK residents and pay about 1.24% of UK taxes
It's curious that the percentages used to defend not taxing the rich (whether they are UK citizens, or operating as "non-doms") tend to be what percentage of the tax burden they pay. But it's never what percentage of their income and capital gains they pay as tax.
I think the latter is a fairer representation, considering we have a progressive taxation system. Someone who is earning over £125k a year should be paying close to 45% of their income and capital gains.
The question is: are they? If not, why not?
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If they're here they tend to spend money, and employ people. That all ends up as tax slightly more indirectly.
So what you are saying is, it eventually trickles down?
edit: The reality is they don't spend enough for it to offset the harms that wealth inequality brings.
I know a couple of people who have been using this London loophole as a way to avoid paying taxes anywhere at all. They are not residents here, they are not residents there, and their income is earnt globally. So they think they shouldn't have to pay tax to any particular country.
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Are they? Or are they there to outcompete ordinary people for houses, labour, etc?
We don't need a bigger market for luxury dog sitters or sports car manufacturing, better allocate those resources for childcare, elder care, or other chronically understaffed fields.
That's just arguing trickle down economics, which has a decades long story of failure.
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They don’t need to be there to employ people, and they don’t spend as much as most people do as a portion of their income or wealth.
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And if they just pay tax like everyone else, even more tax!
slightly more indirect, with more loopholes with more of the cash exiting the cash flow cycle, choking the life out of the economy.
There are plenty of people with money, who do pay taxes, who can start those businesses. We don’t need trickle down economics in order to function as a society.
I employ people and I am not a billionaire. I also pay my taxes. Crazy I know.
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"slightly more indirectly" is an interesting way to say "by distorting local economies and politics around the idiosyncratic needs and desires of a very small number of uber-wealthy foreigners."
According to the article, there was one person who was hiring over 100 people to take care of their needs. That person is now leaving the UK.
The irony of a superrich claiming to feel 'unwelcome' in a country while claiming non-domiciled status in it cannot be lost on the author. Also, for all the talk of scaring away "job creators" I doubt the guy running a "Dubai-based venture capital firm" was creating many jobs in the UK.
The number of non-doms fell from 74,100 to 73,700 in the year up to April 2024, whilst tax intake from them increased by £100m. I do not consider 400 out of 74,100 as them fleeing....
[1]: Non-dom tax take jumped £100mn in 2023-24 despite falling numbers - https://on.ft.com/3Gx1MXU via @FT
Yeah except that's the 300 richest which changes the math of the tax take.
Tax take increased, not decreased? So it's unlikely it was the 300 richest, or at-least 300 highest tax-payers.
A lot of magical thinking in policy these days. Global rich people went to London BECAUSE of the tax treatment.
There was no magical property of London that attracts people DESPITE higher taxes.
Very difficult to have any policy discussion when a second order effect is involved.
Why does it have to be assumed that having the ultra wealthy living in your country and not paying taxes is a net positive? It seems close minded to just ignore the possibility that those people are causing more harm than good.
I think the consensus view is that they are massive net positive contributors (they still pay a lot in taxes in terms of things stamp duty or VAT, they spend lots of money in the country supporting business and employing people, and they don’t consume much in the way of resources like using the NHS or publicly funded schools).
I think the optics are clearly bad but the question I think people really have to ask is what they rather these people paying something in the country, or nothing at all (because there’s nothing keeping them there if it’s viewed as too expensive to stay)
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It's not an assumption. The article stated that non domiciled residents DO pay a lot of taxes. That's why the UK is concerned that they are leaving and modelled against that risk.
I did a quick check and it seems like non dom's are about 0.11% of UK residents and pay about 1.24% of UK taxes. And this doesn't account for indirect benefits such as taxes paid on wages they generate.
if i understood the article, these people (1) didn’t make their money in your country, and (2) are not making money in your country. they just happen to reside there. it seems nonsensical to me to tax revenue that was made in foreign land. but people who love and swear by taxes think that more tax revenue can solve world hunger.
if the uk wants tax money on revenue maybe they should incentivize these so-called super-rich to run their affairs from within the uk?
I’d presume they are spending a lot of money locally and probably employing a staff locally and driving other economic activity locally but I guess I could be wrong.
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London is also an attractive global city like few others. Most rich people would not want to live in Andorra-la-Vella just for tax breaks.
This might be persuasive if the reports didn't indicate that substantially more non-doms are leaving the UK than expected. The options are not a binary UK or Andorra.
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I don't understand. Why is this a loophole? Why is money earned abroad and kept abroad taxable not by a foreign government but by the UK government?
For virtually every other jurisdiction, natural persons pay tax where they live, not where they source their income.
If I happen to work for a foreign corporation, I don’t get to skip paying tax.
In the US you pay taxes in the state where you earn the income and where you live. So for example if you own a pass-though tax corporation and it earns income in all states then you must file and pay taxes in all states.
Not true. This is only true for US which taxes your global income.
Most of the world taxes only income earned in that country.
> If I happen to work for a foreign corporation, I don’t get to skip paying tax.
Sure, because you earned it your country, and not in the country of domicile of foreign corporation.
EDIT: Correction, I see now that most countries do tax worldwide income, just that they have DTA so you offset taxes paid abroad.
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It’s standard in Europe and many other countries to tax their “tax residents” on their worldwide income. The tricky part is that sometimes that external income is also taxed at source, but this is usually taken care of by tax treaties, which means that you pay the higher of the tax rates, but only once.
I live in europe, and I would be breaking the law if this would true. Would love to see some citations.
It's only the US which taxes worldwide income. It's not true for rest for the world.
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Because it allows people to very easily funnel their income through offshore companies, and avoid being taxed on it because it’s “earned” in Cyprus or Cayman Islands.
_good_. the average person is struggling to feed and shelter themselves and we’re worried that if we don’t coddle the rich the economy will collapse. let them leave and we can rebuild a society that supports everyone.
Wrong, our society is here to support pensioners (one fifth of the population) and those on disability benefits (one quarter of the working age population). Every millionaire that leaves, leaves a disproportionate hole in the amount of tax collected and we borrow more to cover the gap. This will continue until the IMF is forced to step in.
I really agree with you, except I don't think we should be letting them leave
I think we should be taking a page out of French History
Every so often I think the wealthy classes need a reminder that they only get to have what they have at the pleasure of the lower classes
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Yeah, give your family's money to trump so that he can redistribute it to the poor.
Are these people really "investors and entrepreneurs" in the UK economy if they were staying there specifically as a tax dodge, when any profits from UK economic activity would always have been taxed?
Is this a bad thing? You'd only leave if you weren't contributing to the local economy. People who, for example, run a small business in the UK aren't impacted at all.
How is a rich person living in London not contributing to the economy? They don't actually make their money in United kingdom, they just import it to live near good Indian food, fish and chips, and the theater. Theatre.
Not paying taxes while enjoying the benefits?
Being able to pay higher prices than locals so prices for goods and housing go up? "investment properties" and such
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If you accept the premise that these individuals are net contributors (paying far more in taxes than they consume in services), and that their income and assets are largely non-UK and mobile, then the reality is simple: you either compete for them and treat them differently, or you lose them to jurisdictions that will.
Some individuals are net assets. Many are not.
If I bring in $2 billion in cash to a 100 person town in the US, with a median income of $40k: I can hire none, some, or all of them for $40k to $60k; and make the cost of living too expensive by buying up most of the land, to the point that the remaining stock will cost double or triple the cost.
This is the majority of the oligarch class (Russia, China, Middle East, private equity) who’ve streamed into the democratic West and is an absolute net negative.
Then you have billionaires like Musk (politics aside) who aren’t parking their wealth but building new industries; and the cost of living goes up because of the wages and perhaps demand, as more workers stream in (net positive).
Then you have the rest of the billionaires (high finance, Amazon) whose method is wealth extraction through consolidation and off-shore labor (arguably net negative).
That's the thing I never understand about tax the rich, as soon as you do that they're going to leave. Well even before you do that they're going to leave. And a lot of these people do employ a lot of people so they just start companies elsewhere.
And even if you took let's say 95% of their wealth that wouldn't even pay down half of the US debt.
I think all this stuff ends up doing is being a brain drain to make people leave whatever country they're in for other countries
> And a lot of these people do employ a lot of people so they just start companies elsewhere.
Great, do that! Go start companies in other countries, and trickle down their wealth to employees in the form of wages and salaries.
If only they thought of doing that in the UK! Instead of the rich buying up properties turning them into buy-to-lets, both pricing out working people of their first home, and then taking their income as rent.
Most billionaires do employee people in the countries in which they live.
Making some types of billionaires leave is a benefit.
Everybody else should close these loopholes as well for both individuals and corporations.
The minimum corporate tax of 15% is one place to start:
https://taxfoundation.org/blog/global-tax-agreement/
Well the USA isn't following it so it's dead. But also, there were loopholes making it meaningless. For example, here in Switzerland the government said they'd follow it but local governments could provide rebates to companies.
And why not? We don't need the extra revenue. Why should we raise taxes on local companies when we don't want the money? Just because other countries can't control their spending why do we have to raise our taxes? It's stupid.
To call it a loophole makes no sense to me.
Also, smarter policy would be like what Estonia does
- CIT should only be applicable when dividends are paid. So corporations can reinvest that money in the business and not be taxed on it.
- PIT on dividend income should be 0, since that amount has already been taxed(CIT) and the stock holder has paid his due share on that income as a owner of corporation.
>CIT should only be applicable when dividends are paid.
Or dividends should be taxed as normal income.
Dealing with capital gains tax is messier but not impossible.
That‘s why exactly why Cyprus guarantees the non-dom benefits for 27 years
That is probably a good thing.
This didn't happen, the only evidence is PR from one company
https://taxjustice.net/press/millionaire-exodus-did-not-occu...
Before just accepting this at face value, New Statesman claim this is not the case:
https://www.newstatesman.com/politics/2025/07/the-british-we...
Yes, of non Dom's only 400 have left out of just over 70,000
What if you target 0% inflation and instead tax assets at 2%? Same effect as “good inflation”, encouraging investment rather than hoarding, but it funds government rather than just devaluing the currency?
Workers have an irrational dislike of their salary or wages ever going down. The main benefit to 2% per year inflation is giving employers a way to reduce real wages 2% per year during a downturn without the worker noticing.
Most comments on this thread go the way of: “You’ll own nothing and you’ll be happy.”
When is enough going to be enough? Using the example of this article, the UK. There was a 70% increase in government spending during the last 10 years. Do you think that you are getting 70% better public services?
Where is the government spending all our money? And what kind of propaganda is going on to make the people believe the answer is even more taxes?
I love it when the fairy tail libertarianism of this website meets the reality of the UK.
I wonder what people actually think of this result. "tax-the-rich" makes very limited sense unless applied internationally. Many of the super rich are super rich because they have serious influence over, or outright control of foreign states (US rich are a large exception worldwide). Nobody in the US is even 1% as rich as Putin, or Xi, or frankly even just as rich as the grand duke of Luxembourg is.
You cannot tax these people directly, because they'll leave.
You cannot have international cooperation on tax treaties because these people control states.
In other words: you can only tax them either through war, or by totally blowing up trade relationships.
One of these rich persons you mentioned is very unlikely to decide he's going to leave Moska-Oblast and retire in Monaco or anywhere else that's doesn't have a thick bunker at the ready for him.
> Nobody in the US is even 1% as rich as Putin
Putin is estimated to be up to $200 billion in wealth.
The top 4 Americans are all more wealthy: Musk, Zuckerberg, Bezos, Ellison.
There are other kinds of wealth, like the ability to have your enemies accidentally fall out of windows.
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Are people with certain personality disorders more likely to become billionaires? Or do you inevitably develop a personality disorder once you become?
You need to be a sociopath or worse to be filthy rich and feel ok with yourself, imho
Doesn't the billionaire Rupert Murdoch ultimately own the WSJ?
No one ever looks at taxes and says
"hey guys between income tax, and VAT and other goods taxes we literally take more than 50% of the money that the entire lower and middle class is earning! This should be more than enough by a factor of two at the least to run our shitty bureaucracy and public services"
Nope it's always
"Who can we tax more? How to we steal more money for our shitty novelty projects and ideological madness"
Anyone resource strong enough to leave, that usually is the upper class, will eventually do so. Leaving even more predatory taxation pressure against the lower social strata
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Good riddance
On behalf of the US and long suffering Commanders fans, we don't want Dan Snyder back.
> The exemption was restricted over time to largely benefit foreigners who don’t expect to live in the U.K. permanently.
Sounds like it worked out as planned, since they're leaving now.
Plus, 40% inheritance tax is crazy. You'd have to sell off half of what you inherit to pay the tax. Sucks if you're a farmer or a multigenerational family business
Farmers with active farms have not been paying inheritance tax and won't until 2026, and even then there are ways to avoid most of it (couples can pass on £3 million without tax for example). See https://www.gov.uk/government/news/what-are-the-changes-to-a...
The other side of the coin is that inheritance is allowed at all. We could tax at 100% above a certain threshold, wealth only exists because it is permitted through the recognition of property rights. 40% is arguably more than reasonable when you’re desiring to transfer generational power the beneficiary did not earn, but simply was lucky to be in the right lineage. It is a lottery ticket.
The 40% only applies to the portion of the estate that exceeds the tax-free threshold, which is currently £325K. If you leave your home to your children or grandchildren, that can be raised to £500K, and if you leave it to your spouse, it increases to £650K.
There are also ways to reduce the tax rate, like through charitable donations.
Like in the US with estate taxes, relatively few people are affected by it.
It's 40% above a threshold; the trouble is that the threshold is laughably tiny when you compare it to house prices.
It's also relatively easily defeated by transferring assets to others well in advance of your death, which is the kind of thing very wealthy people are more likely to be able to arrange.
Very unmeritocratic society if you can just win by inheriting half of 20 billion dollars.
Why would I care if someone inherits billions of dollars. I'm going to go on enjoying my life, rather than wasting it being upset someone else has more than me.
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I’m not even “rich” and yet thinking of moving myself and my assets somewhere else like Dubai. Why should I pay into a system I get virtually nothing out of? Furthermore my country took my freedom of movement in the EU away. That’s another incentive for me to leave - five years in Portugal and I get freedom of movement back.