Budget triggers high earners to move abroad
The budget announcement that was made earlier this month is likely to increase the number of successful, working-age Britons moving overseas. This is according to the CEO of deVere Group, Nigel Green. The deVere Group recently ran a survey of 315 clients revealing that 72% of middle to top earners in the UK have “seriously considered”, “are thinking about” or “would be tempted by” moving overseas. Furthermore, “personal taxation” was cited as a primary motivation for moving from the UK for 65% of the respondents.
Mr Green says: “The decision announced in the Budget to raise the threshold will drag yet more hard-working British people into the higher rate tax band. There’s already been an extra 1.4 million UK taxpayers pulled into this band over the last three years, with around 4 million paying this rate today. HMRC believes that the government’s plans will see that number reach 5.3 million by 2016“. Mr Green also commented: “I suspect that this could all trigger more of Britain’s top achievers to consider a move abroad to safeguard and maximise their money in order to give themselves and their families the best lifestyle opportunities“.
This news comes not long after the Chancellor George Osborne announced plans to reduce the Lifetime Allowance from £1.5 million to £1.25 million, which has the potential to affect 4.7 million expats whose pensions are based in the UK and is likely to further encourage expats to move their pensions overseas to a QROPS (read our guide to Qualifying Recognised Overseas Pension Scheme here). The LTA limit drop could mean that wealthier expats could risk being taxed by up to 55%, whereas those that have moved their pension to a QROPS would not be affected.
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Information correct at time of publication