Angela Rayner’s demand that Rachel Reeves hit pensioners and high-earning Brits with tax rises instead of cutting spending has been criticised by a financial expert as “unworkable”. The Deputy Prime Minister suggested the Government should hike taxes on savers, high-earners and pensioners in a leaked memo to the Chancellor after becoming frustrated with Ms Reeves’ slew of controversial spending cuts. Philippe Aramante, head of private clients at Henley and Partners, said the move could be the final straw for wealthy Brits considering leaving the country.
“If a country like the UK continues to make its fiscal balance sheet healthier by taking away from those who have more, those who have more will become fewer,” he told The Telegraph. “The equation will not work.” The proposed measures include removing inheritance tax relief on shares for the Alternative Investment Market (AIM) and increasing tax on dividends paid by those most well-off in the country.
“The concern that wealthy people have is [less] about wealth acceleration and more about wealth preservation,” Mr Amarante added.
“If a government is trying to tax them unreasonably high, these people will go somewhere else because they can.”
Over 10,000 millionaires fled the UK last year, according to Henley and Partners – the highest level on record, and more than double the number that left in 2023.
Among them were property investor brothers Ian and Richard Livingstone, who relocated from the UK to Monaco, and Richard Gnodde, vice-chairman of Goldman Sachs in Europe, who moved to Milan, a city known for its tax breaks to the wealthy.
The firm’s analysis revealed that London and Moscow were the only two cities on the globe to have fewer rich people than a decade ago – with Brexit and the fall in the pound also blamed for the UK’s drop in appeal for millionaire’s since 2014.
It has accompanied a spike in wealthy Brits seeking dual citizenship in other countries, Mr Amarante said, a trend that he thinks has also been partially driven by the COVID-19 pandemic and a desire for flexibility in the face of “another crisis of a global scale”.
“If you had asked me two, three or four years ago, I would have said the majority of our clients are those will less powerful passports,” he added. “But that is not valid anymore. One of our largest source markets is actually the US and the UK now.”
