Exit Tax Plans Will Hit Wealthy Britons Leaving UK With Settling Up Charge

Wealthy Britons considering relocating to low tax jurisdictions may soon find themselves facing a significant financial sting as government plans emerge to introduce a so called settling up charge on those leaving the country. Chancellor Rachel Reeves is poised to introduce a departure levy of 20 per cent on business assets for individuals emigrating overseas a move which would bring the UK in line with most other G7 nations.

At present British citizens who emigrate can sell UK assets including shareholdings after leaving without incurring capital gains tax which is typically charged at 20 per cent. Under the prospective reforms this tax would be payable at the point of departure though there would be an option to defer the payment if the assets are not sold immediately.

Policy advisors estimate that such measures could generate approximately 2 billion pounds for the Treasury. This drive for additional revenue comes amid forecasts that Reeves may pursue the fastest pace of tax increases in more than five decades as the government seeks to bolster public finances.

The exit tax proposal is to be paired with plans halting the practice of exempting new immigrants from capital gains tax on foreign investments made prior to their arrival in the UK. According to tax experts this dual approach would enhance fairness in the system and potentially encourage greater inward investment by offering a level playing field for both departing and incoming residents.

With an exodus of an estimated 16500 millionaires expected this year according to private wealth migration studies there are mounting concerns among officials that the UK is losing its appeal as a destination for the global elite. The shifting tax landscape comes after recent clampdowns on the non domiciled regime a key factor prompting some high net worth individuals to seek lower tax shores.

The advancement of the settling up charge has been made more feasible since Brexit which removed previous European Union legal constraints restricting such departure taxes. Countries such as Australia and Canada already operate similar systems allowing them to collect capital gains tax on the unrealised gains of those exiting the country.

Treasury insiders stress that the exit tax is one of several options currently under review with no firm decisions made ahead of the next Budget announcement. Observers caution that any delay in implementation may prompt a surge in capital outflows as those affected hurry to leave before new rules are enforced. The UK’s status as an outlier could thus end abruptly as ministers look to plug fiscal shortfalls and reshape the landscape for wealthy residents.