The UK Government is reportedly weighing plans to introduce a 20% tax on the business assets of wealthy individuals who choose to leave the country, as Chancellor Rachel Reeves looks for new ways to boost public finances.
According to The Times, the Treasury is drawing up proposals for a so-called “settling-up charge”, designed to align the UK with other G7 nations and potentially raise around £2 billion in additional revenue.
Currently, British citizens who relocate abroad are still subject to 20% capital gains tax on the sale of UK property and land worth more than £6,000, but they are exempt from the same tax on the sale of certain other assets, such as company shares.
Under the proposed plans, this exemption would be removed, with a 20% charge applied to the value of those assets at the point of departure.
A government source confirmed that the settling-up charge is one of several options being modelled by the Treasury ahead of the next budget but stressed that no final decisions have been made.
James Smith, Research Director at the Resolution Foundation, told The Times: “The idea would be that if someone decides to leave the country and relocate to a low-tax jurisdiction they would have to pay tax on any asset ‘gains’, like shareholdings, that remained in the UK.
This would be different from the situation at the moment where, if someone relocates to somewhere like Dubai, for example, they can sell off their UK assets after they have left the country and not be liable for any UK capital gains tax.”
Experts note that the UK remains an “outlier” among major economies for not already having such a tax, and the proposal could mark a significant shift in how Britain handles wealth leaving its borders.
