The greater threat to life in the UK as we know it?
Since that infamous referendum three years ago much has been written about Brexit and the news in the United Kingdom continues to be dominated by this one subject as the country plays out its messy divorce from the European Union in front of the eyes of the world. But as the political situation in the UK becomes ever more heated, visions of the future direction of the country also differ greatly.
One of the concerns of voters at the time of the referendum was the high level of immigration with concerns cited over the right of free movement afforded to EU citizens. Such migrants have their own concerns regarding their status after Brexit and how this will affect their right to stay in the UK along with access to its services. Similarly, UK expatriates living in EU countries also anxiously wait to see how their lives will be affected if and when the UK finally departs from the EU.
Another group of non-UK citizens, who have moved to the UK and elected to be taxed on the remittance basis as non-UK domiciled individuals, are also looking ahead with some concern. Many have already seen the previously more favourable non-domiciled legislation pared back by successive governments as the subject became a political football in recent elections.
The Brexiteer vision of the UK as a low tax jurisdiction, attracting wealthy individuals, striking trade deals around the globe and modelling itself as the Singapore of Europe whilst prospering outside the EU in a similar manner to Norway or Switzerland seems a distant dream now. The polarisation of opinion in the UK has stifled any future vision as differing factions seek to enact or prevent Brexit at all costs.
Previously, whilst introducing some restrictions for political purposes, politicians of both the left and right have sought to preserve the appeal of the non-domiciled regime aware that such individuals make a significant overall contribution to the UK economy. This is in the face of strong competition from favourable inward migration schemes in other European countries such as Portugal, Italy, Malta and Cyprus. The UK is only too well aware that the loss of such persons, and the net contribution they make would be detrimental to its exchequer.
Over the years the Probus group has assisted many such individuals in settling in the UK and ensuring that their assets are appropriately protected and suitably invested. Such clients have enjoyed the lifestyle that the UK offers, and in particular the world city that is London, if not always the weather. But the political climate is changing and more recently enquiries have centred on what if I have to leave?
Certainly there is no shortage of alternative options. In addition to the favourable regimes still available in some EU countries Probus has also assisted with relocation to stable and desirable jurisdictions through its local offices in Monaco, Dubai and Switzerland. But with the uncertainty over Brexit, and the many unknowns this brings, the catalyst to reconsider the UK as destination of choice appears to be the political changes Brexit could result in domestically.
The Conservative government of Prime Minister Boris Johnson is a minority. It’s failure to command a majority in the Houses of Parliament has been underlined by a series of recent defeats preventing his desire to call a General Election in addition to passing legislation that obliges him to ask the EU to an extension of the current anticipated leaving date of 31 October against his stated desire to leave on that date.
Parliament has just entered an end of term shut down, illegally so one court has found, but will eventually return and ultimately there will be a General Election. However, when it comes, the electoral system is somewhat weighted against the Conservatives being able to command a majority. This leaves the door open to the Labour party which, under the leadership of Jeremy Corbyn, and his self-proclaimed Marxist shadow chancellor, John McDonnell, has swung sharply to the left in recent years.
With the Labour party comes talk of nationalisation of key industries including the trains, utilities and postal service. The threat of nationalisation is not new but doubts over the level of any compensation has raised serious concerns. In addition, larger companies may be obliged to give shares to employees and the payment of dividends will come under greater scrutiny. Equality is very much the aim and McDonnell has vowed that he will achieve this by driving out from the UK the wealthiest if necessary regardless of the adverse effect this will have on UK tax revenues.
The City of London, the UK ‘s financial centre and the heartbeat of its economy, already suffering in anticipation of Brexit, could become a prime target of a left-wing government as banker bashing has become a political sport in the UK and bonuses are repeatedly attacked. Residential property is another area that Corbyn’s Labour has promised to address and private landlords fear that they may lose out if he extends a right to buy to tenants.
In the midst of all this, the inevitable tax increases, whilst significant even for middle income earners, almost get lost in the noise. Little has been said about what changes, if any, are envisaged that would affect non-domiciled individuals but trust and confidence in UK politicians is in short supply at present. Perhaps most telling is Mr Corbyn’s friendship and support of the disputed Venezuelan leader Nicolàs Maduro.
With such a scenario waiting in the shadows it is inevitable that non-domiciled individuals, as well as some wealthy domiciled residents, in the UK have started thinking about their futures and considering their options. The Probus group would be happy to discuss any such concerns further and help explore other favourable opportunites.