Speculation regarding a potential UK wealth tax has already begun to negatively impact the economy, warns Nigel Green, CEO of deVere Group. He states that the idea alone causes investor confidence to deteriorate, leading wealthy individuals to restructure assets and consider overseas residency. He argues that even without a formal tax, the mere threat can drive capital out of the UK. Green cites international examples of wealth taxes that have failed and points out the administrative difficulties in enforcing such a policy due to illiquid asset valuation challenges.
Even floating this idea is dangerous. Every day that the government fails to rule it out, confidence erodes. Wealth is highly mobile.
This isn't a theoretical risk. We've already seen a sharp uptick in high-net-worth individuals actively restructuring their assets and exploring overseas residency this year.
The wealthy don't just sit and wait for the government to reach deeper into their pockets—they act; and once they go, it's incredibly difficult to win them back.
You can't efficiently tax what you can't properly value. Illiquid assets like private companies, pensions, real estate and art portfolios aren't priced daily.
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