Chancellor Rachel Reeves is reportedly considering an 'exit tax' for wealthy Britons leaving the UK, as she seeks to address a multibillion-pound shortfall in public finances. The proposed 'settling-up charge' would impose a 20% levy on business assets left in the country, aligning the UK with most other G7 nations that already have similar measures.
Shadow justice secretary Robert Jenrick criticised the plan as 'crazy', arguing it would drive wealth creators abroad. 'We need more entrepreneurs, not fewer! Reeves must rule out this latest desperate move,' he said. Economists have warned that the Chancellor faces pressure to raise taxes or abandon her borrowing rules due to sluggish growth and higher borrowing costs.
Under current rules, emigrants can sell UK assets without paying capital gains tax (CGT), but the new charge would apply to gains on assets like shareholdings left in the country. The Treasury estimates the measure could raise around £2bn, with an option to delay payment for several years.
The move comes amid forecasts that up to 16,500 millionaires could leave the UK this year, driven by tax changes and economic uncertainty. The Henley Private Wealth Migration Report suggests the UK will lose twice as many millionaires as China and ten times as many as Russia.
Professor Andy Summers of the Centre for Analysis of Taxation noted that Brexit enabled the policy, as EU freedom of movement rules previously restricted such charges. 'We could now do what Australia and Canada already do,' he said. However, James Smith of the Resolution Foundation warned that the tax must be implemented immediately to prevent capital flight.
