Britain's Wealth Exodus: A Growing Concern for Economic Growth

Britain's wealth creators are fleeing in droves, taking their assets and revenue with them, as the government fails to understand the business and tax environment needed to stop them. Former Chancellor George Osborne has warned that the Treasury is not set up to grasp the issue, citing Italy's more attractive tax regime as a major draw for wealthy foreigners. The scale of the wealth exodus is unknown, but critics argue that Labour's plans to tax assets rather than income will only exacerbate the problem.

Key Takeaways:

• George Osborne claims the Treasury lacks understanding of the ecosystem of wealthy foreigners and non-doms, making it difficult to create an attractive business environment.
• Rishi Sunak abolished non-domiciled status, but Osborne suggests alternative solutions, such as charging wealthy foreigners an annual lump sum in tax, as Italy does.
• Italy's non-dom tax system charges a flat tax of 200,000 euros on foreign-sourced income, while Portugal charges a flat rate of 20 percent tax on certain income and exemptions on global income.
• Richard Gnodde, vice-chairman of Goldman Sachs, estimates that a significant number of wealthy individuals have left the UK, with some families relocating with assets worth £10billion-£20billion.
• Critics argue that Labour's plans to tax assets will only increase the wealth exodus, as wealthy individuals find ways to minimize their tax liabilities.
• Boris Johnson warns that Labour's policies are driving away talented people from abroad, citing the example of refugees fleeing the "Labour purges" in London.
• The book's authors note that the Department of Trade and Industry's 10-page pack on setting up operations in the UK is no longer applicable, suggesting that the government's policies are driving away businesses and talent.

Statistics:

• £10billion-£20billion: the estimated value of assets taken from the UK by wealthy individuals.
• 200,000 euros: Italy's flat tax on foreign-sourced income.
• 20 percent: Portugal's flat rate of tax on certain income.
• 10 years: the timeframe since the Department of Trade and Industry's pack on setting up operations in the UK was last applied.

Sources:

• "Prosperity Through Growth" by George Osborne, and the authors of the book, including Lord Elliott, the founder of the TaxPayers' Alliance.
• Gordon Rayner, Associate editor, (Twitter handle not provided)
• Richard Gnodde, vice-chairman of Goldman Sachs, and Boris Johnson, former Prime Minister.