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The U.K. closed a tax loophole for the global rich, now they're fleeing
- neonate 1y agohttps://archive.md/8ndug https://archive.md/8ndug
- vjvjvjvjghv 1y agoThat is probably a good thing.
- graeme 1y agoA lot of magical thinking in policy these days. Global rich people went to London BECAUSE of the tax treatment. There was no magical property of London that attracts people DESPITE higher taxes. Very difficult to have any policy discussion when a second order effect is involved.
- foobarchu 1y agoWhy does it have to be assumed that having the ultra wealthy living in your country and not paying taxes is a net positive? It seems close minded to just ignore the possibility that those people are causing more harm than good.
- SoftTalker 1y agoI’d presume they are spending a lot of money locally and probably employing a staff locally and driving other economic activity locally but I guess I could be wrong.
- only-one1701 1y agoIf only there was some historical data, maybe even 30 years of it, that could tell us whether or not putting money in the hands of the ultra wealthy had a sort of “trickle down” effect that benefited everyone else too!
- shivasaxena 1y agoFine, but is there any data that having ultra wealthy residents in your country(like Sunak's wife) harms everyone else?
- sorcerer-mar 1y agoReal estate inflation is a pretty obvious way it does that.
- mattmanser 1y agoThe GP is being sarcastic, we have 30 years of evidence. It shows that trickle down economics doesn't happen. The harm you're looking for is massively inflated asset prices, for example pushing housing out of the affordable range of normal residents and the actual tax payers. So the mega rich turn out to be parasites in many ways.
- hollerith 1y agoAlso, more than once, the mega rich caused my meat to spoil. Terrible people!
- only-one1701 1y agoI know you think you’re joking but I’d encourage you to consider the consequences of deregulating the food industry.
- yawboakye 1y ago> putting money in the hands of the ultra wealthy that’s a very sinister way to describe the reward for their extraordinary efforts. who’s putting money in their hands? where did this ‘who’ get the money from?
- slater 1y agowhat are these 'extraordinary efforts'?
- sundaeofshock 1y agoA rich eats three meals a day, just like everyone else. They may eat nicer food, but they do t consume that much more than the average person. Indeed, the rich tend to hoard their wealth, removing it from the economy while the average person spends most of the money they earn. Taxing the billionaires is a net plus for any economy.
- shivasaxena 1y agoWhat do you mean by hoard their wealth? I assume like everyone else they have their wealth in banks/stocks etc and not matreses.
- DoesntMatter22 1y agoHow is it a net plus though? Is there's a serious hike in taxes the billionaires will just leave and open companies elsewhere
- Isofarro 1y agoThey already "open companies elsewhere". From the article, the non-dom status is a tax-exemption on a non-dom for profits and revenues from businesses outside the UK. If these non-dom billionaires leave, and they aren't currently paying tax, will we even notice? The housing market noticed; again from the article, the value of properties valued above £10m dropped by 37%. So these "just leavers" aren't just leaving, they are taking a near 40% hit on selling up.
- DoesntMatter22 1y agoSo then leaving is giving the government less tax revenue and hence less money for other people
- throwaway7783 1y agoThat is the theory, but unlike taxes there is neither an obligation to spend nor a required threshold to spend. So basically just hoping that billionaires spend and trickle down.
- yawboakye 1y agoif i understood the article, these people (1) didn’t make their money in your country, and (2) are not making money in your country. they just happen to reside there. it seems nonsensical to me to tax revenue that was made in foreign land. but people who love and swear by taxes think that more tax revenue can solve world hunger. if the uk wants tax money on revenue maybe they should incentivize these so-called super-rich to run their affairs from within the uk?
- balderdash 1y agoI think the consensus view is that they are massive net positive contributors (they still pay a lot in taxes in terms of things stamp duty or VAT, they spend lots of money in the country supporting business and employing people, and they don’t consume much in the way of resources like using the NHS or publicly funded schools). I think the optics are clearly bad but the question I think people really have to ask is what they rather these people paying something in the country, or nothing at all (because there’s nothing keeping them there if it’s viewed as too expensive to stay)
- ksec 1y agoMost of the luxury and high end restaurants are closing down precisely because they are leaving. Many with a lot of spending, including their employees, which do get VAT taxed as part of their consumption. They also hire a lot of people and stayed after Brexit for one reason or another, Football, Culture, Kid's Education, Use of English, Comparatively high living standard in London compared to other European Cities. They stayed even after Brexit, but I think with a lot of things happening a lot are moving. And within their circle knowing others are moving elsewhere has an effect on others planning to move as well. Very unfortunate. Brexit didn't bring as much damage as some might expect. But this new government, or may be even previous government as well all compounded to the decision happening now.
- graeme 1y agoIt's not an assumption. The article stated that non domiciled residents DO pay a lot of taxes. That's why the UK is concerned that they are leaving and modelled against that risk. I did a quick check and it seems like non dom's are about 0.11% of UK residents and pay about 1.24% of UK taxes. And this doesn't account for indirect benefits such as taxes paid on wages they generate.
- deleted 1y ago[deleted]
- fmajid 1y agoLondon is also an attractive global city like few others. Most rich people would not want to live in Andorra-la-Vella just for tax breaks.
- graeme 1y agoThis might be persuasive if the reports didn't indicate that substantially more non-doms are leaving the UK than expected. The options are not a binary UK or Andorra.
- fmajid 1y agoThere aren't many global cities that can compare. New York, Paris, Tokyo, possibly Seoul or the San Francisco Bay Area. Dubai isn't it, unless all you care about is shopping.
- graeme 1y agoYou still have not reckoned with the fact that they are leaving. Whatever else is true the non-domiciled have determined that "somewhere else" is more attractive than the UK without the non domiciled tax regime.
- comrade1234 1y ago> The exemption was restricted over time to largely benefit foreigners who don’t expect to live in the U.K. permanently. Sounds like it worked out as planned, since they're leaving now. Plus, 40% inheritance tax is crazy. You'd have to sell off half of what you inherit to pay the tax. Sucks if you're a farmer or a multigenerational family business
- lapphi 1y agoVery unmeritocratic society if you can just win by inheriting half of 20 billion dollars.
- 9cb14c1ec0 1y agoWhy would I care if someone inherits billions of dollars. I'm going to go on enjoying my life, rather than wasting it being upset someone else has more than me.
- sundaeofshock 1y agoBecause all that wealth gives the person an outsized ability to influence government. See the 2024 US election cycle for numerous examples.
- toomuchtodo 1y agoThe other side of the coin is that inheritance is allowed at all. We could tax at 100% above a certain threshold, wealth only exists because it is permitted through the recognition of property rights. 40% is arguably more than reasonable when you’re desiring to transfer generational power the beneficiary did not earn, but simply was lucky to be in the right lineage. It is a lottery ticket.
- janice1999 1y agoFarmers with active farms have not been paying inheritance tax and won't until 2026, and even then there are ways to avoid most of it (couples can pass on £3 million without tax for example). See https://www.gov.uk/government/news/what-are-the-changes-to-agricultural-property-relief https://www.gov.uk/government/news/what-are-the-changes-to-a...
- The_suffocated 1y ago> a centuries-old tax loophole, abolished in April, that catered to the global rich. The nondomiciled—or non-dom status, as it is known—allowed foreigners living in the U.K. to pay tax only on what they earned domestically. Profits made abroad were ignored unless brought into the U.K. I don't understand. Why is this a loophole? Why is money earned abroad and kept abroad taxable not by a foreign government but by the UK government?
- danielheath 1y agoFor virtually every other jurisdiction, natural persons pay tax where they live, not where they source their income. If I happen to work for a foreign corporation, I don’t get to skip paying tax.
- voxic11 1y agoIn the US you pay taxes in the state where you earn the income and where you live. So for example if you own a pass-though tax corporation and it earns income in all states then you must file and pay taxes in all states.
- shivasaxena 1y agoNot true. This is only true for US which taxes your global income. Most of the world taxes only income earned in that country. > If I happen to work for a foreign corporation, I don’t get to skip paying tax. Sure, because you earned it your country, and not in the country of domicile of foreign corporation. EDIT: Correction, I see now that most countries do tax worldwide income, just that they have DTA so you offset taxes paid abroad.
- pmyteh 1y agoWe (the UK) have a very extensive set of double taxation treaties too. The point of non-dom status is that it doesn't even matter if your earnings were taxed elsewhere: they're still not liable in the UK.
- macleginn 1y ago
- deleted 1y ago[deleted]
- mickgardner 1y agoDoes London need the Global Rich hanging around if they’re not willing to pay taxes? Is it necessary to have the tax bring in 30 Billion in order for it to be considered a success? If nothing else, this tax demonstrates to those who DO pay tax, that the Government is willing to treat earners equally and fairly, regardless of how much tax it brings in.
- trebligdivad 1y agoIf they're here they tend to spend money, and employ people. That all ends up as tax slightly more indirectly.
- XorNot 1y agoThat's just arguing trickle down economics, which has a decades long story of failure.
- dijit 1y agoLikely you’ve been flagged because everyone on hackernews refuses to see themselves as working class and think that we’re the global elite that needs protecting. “Failure” is of course subjective, but I would say that the gargantuan increase in wealth inequality is a datapoint in favour of suggesting that its a failed model. Post-War consensus Britain was a golden age, and neoliberalism has been harmful to the quality of life for an overwhelming number of British people. This is just factual, by all the data we have.
- gruez 1y ago>That's just arguing trickle down economics, which has a decades long story of failure. Deng Xiaoping's "let some people get rich first" worked out pretty well.
- ujkhsjkdhf234 1y agoThis worked because China had very strong regulatory frameworks and redistribution was at center of that philosophy. The entire point of letting a few people get rich was that those people who get rich will need to pay taxes to redistribute that wealth around the country. The people who hoard the wealth in the US actively attack regulation and avoid taxes so that they don't have to redistribute the wealth. At that point, you're a drain on the system.
- laweijfmvo 1y ago_good_. the average person is struggling to feed and shelter themselves and we’re worried that if we don’t coddle the rich the economy will collapse. let them leave and we can rebuild a society that supports everyone.
- bluefirebrand 1y agoI really agree with you, except I don't think we should be letting them leave I think we should be taking a page out of French History Every so often I think the wealthy classes need a reminder that they only get to have what they have at the pleasure of the lower classes
- Nasrudith 1y ago[dead]
- comrade1234 1y agoYeah, give your family's money to trump so that he can redistribute it to the poor.
- adammarples 1y agoWrong, our society is here to support pensioners (one fifth of the population) and those on disability benefits (one quarter of the working age population). Every millionaire that leaves, leaves a disproportionate hole in the amount of tax collected and we borrow more to cover the gap. This will continue until the IMF is forced to step in.
- packetdust 1y agoOn behalf of the US and long suffering Commanders fans, we don't want Dan Snyder back.
- elil17 1y agoIs this a bad thing? You'd only leave if you weren't contributing to the local economy. People who, for example, run a small business in the UK aren't impacted at all.
- readthenotes1 1y agoHow is a rich person living in London not contributing to the economy? They don't actually make their money in United kingdom, they just import it to live near good Indian food, fish and chips, and the theater. Theatre.
- k4rli 1y agoNot paying taxes while enjoying the benefits? Being able to pay higher prices than locals so prices for goods and housing go up? "investment properties" and such
- readthenotes1 1y agoThey pay their vats and they pay property taxes and presumably have insurance and grocery bills etc. Which benefits are they enjoying that they are not paying the taxes for? National defense?
- janice1999 1y agoThe irony of a superrich claiming to feel 'unwelcome' in a country while claiming non-domiciled status in it cannot be lost on the author. Also, for all the talk of scaring away "job creators" I doubt the guy running a "Dubai-based venture capital firm" was creating many jobs in the UK.
- byefruit 1y agoBefore just accepting this at face value, New Statesman claim this is not the case: https://www.newstatesman.com/politics/2025/07/the-british-wealth-exodus-is-a-big-fat-myth https://www.newstatesman.com/politics/2025/07/the-british-we...
- zipy124 1y agoYes, of non Dom's only 400 have left out of just over 70,000
- deleted 1y ago[deleted]
- spwa4 1y agoI wonder what people actually think of this result. "tax-the-rich" makes very limited sense unless applied internationally. Many of the super rich are super rich because they have serious influence over, or outright control of foreign states (US rich are a large exception worldwide). Nobody in the US is even 1% as rich as Putin, or Xi, or frankly even just as rich as the grand duke of Luxembourg is. You cannot tax these people directly, because they'll leave. You cannot have international cooperation on tax treaties because these people control states. In other words: you can only tax them either through war, or by totally blowing up trade relationships.
- andsoitis 1y ago> Nobody in the US is even 1% as rich as Putin Putin is estimated to be up to $200 billion in wealth. The top 4 Americans are all more wealthy: Musk, Zuckerberg, Bezos, Ellison.
- krispyfi 1y agoThere are other kinds of wealth, like the ability to have your enemies accidentally fall out of windows.
- spwa4 1y agoPutin controls the entire Russian economy. In other words, by today's valuations for companies his net worth would be something like 40*GDP(Russia). Which works out to about 80 Trillion USD. You could say that number is artificial. But you could say the same about any stock market valuation. Even that ignores that even 80 Trillion wouldn't buy the power Putin has. It would, for example, not buy 8000 nukes. I'm 100% sure that if Elon Musk threatened to nuke Washington he'd be in prison within the hour, and if his wealth was 1600 times bigger than it is (which would bring him near Putin), that wouldn't change things. Reality is not a superman movie. The grand duke of Luxembourg is worth about 400 billion USD by the same measure, or a bit more than Elon Musk (although that ignores that the risk to Luxenburg as a country is MUCH less than the risk to Elon Musks' companies)
- 1y ago
- bashtoni 1y agoThe British government closed this loophole because it's politically easier than the strategy which is actually needed: properly taxing assets. This is much harder to evade - if you own most of Mayfair, you can't just move your assets elsewhere - they are very clearly tied to the location. Of course, this would mean taxing powerful aristocrats, including the royal family. With their large majority, the British government had the opportunity to do this, but decided to take an easier path. The reason why this path was easier is now becoming clear to them.
- shivasaxena 1y agoWait are you suggesting that we tax assets instead of income?
- andrepd 1y agoIt's not a revolutionary idea. That I know of, the Netherlands does it, somewhat. How it works is: rather than taxing capital gains, with its myriad loopholes and counterloopholes, you tax assets directly: assume a neutral sort of "risk-free" rate of return, and then tax a percentage of that. E.g. assume yearly return of 1% on cash and savings, 6% on other assets, etc, then levy tax of 30% on that (past a tax-free allowance of 25k€ per person). Simple, and more effective!
- shivasaxena 1y agoI would consider it very destabilizing idea and an affront to fairness really. As an example, Wouldn't that mean that if my startup raises a round of 1m for 10%, my NW would go to 0 to 9m. 6% of that would be around 0.5m, and 30% tax would mean I would have to pay 162,000 EUR in taxes. As a cash poor founder how do you suggest I pay that. That's why taxing income and not wealth has been the norm.
- balderdash 1y agoNot to mention no one would pay you $9m for your stake and for you to walk away…
- aaron695 1y ago[dead]
- zipy124 1y agoThe number of non-doms fell from 74,100 to 73,700 in the year up to April 2024, whilst tax intake from them increased by £100m. I do not consider 400 out of 74,100 as them fleeing.... [1]: Non-dom tax take jumped £100mn in 2023-24 despite falling numbers - https://on.ft.com/3Gx1MXU https://on.ft.com/3Gx1MXU via @FT
- bhouston 1y agoEverybody else should close these loopholes as well for both individuals and corporations. The minimum corporate tax of 15% is one place to start: https://taxfoundation.org/blog/global-tax-agreement/ https://taxfoundation.org/blog/global-tax-agreement/
- comrade1234 1y agoWell the USA isn't following it so it's dead. But also, there were loopholes making it meaningless. For example, here in Switzerland the government said they'd follow it but local governments could provide rebates to companies. And why not? We don't need the extra revenue. Why should we raise taxes on local companies when we don't want the money? Just because other countries can't control their spending why do we have to raise our taxes? It's stupid.
- shivasaxena 1y agoTo call it a loophole makes no sense to me. Also, smarter policy would be like what Estonia does - CIT should only be applicable when dividends are paid. So corporations can reinvest that money in the business and not be taxed on it. - PIT on dividend income should be 0, since that amount has already been taxed(CIT) and the stock holder has paid his due share on that income as a owner of corporation.
- tonyedgecombe 1y ago>CIT should only be applicable when dividends are paid. Or dividends should be taxed as normal income. Dealing with capital gains tax is messier but not impossible.
- DoesntMatter22 1y agoThat's the thing I never understand about tax the rich, as soon as you do that they're going to leave. Well even before you do that they're going to leave. And a lot of these people do employ a lot of people so they just start companies elsewhere. And even if you took let's say 95% of their wealth that wouldn't even pay down half of the US debt. I think all this stuff ends up doing is being a brain drain to make people leave whatever country they're in for other countries
- Isofarro 1y ago> And a lot of these people do employ a lot of people so they just start companies elsewhere. Great, do that! Go start companies in other countries, and trickle down their wealth to employees in the form of wages and salaries. If only they thought of doing that in the UK! Instead of the rich buying up properties turning them into buy-to-lets, both pricing out working people of their first home, and then taking their income as rent.
- DoesntMatter22 1y agoMost billionaires do employee people in the countries in which they live.
- nobodyandproud 1y agoMaking some types of billionaires leave is a benefit.
- blargey 1y agoAre these people really "investors and entrepreneurs" in the UK economy if they were staying there specifically as a tax dodge, when any profits from UK economic activity would always have been taxed?
- CjHuber 1y agoThat‘s why exactly why Cyprus guarantees the non-dom benefits for 27 years
- balderdash 1y agoIf you accept the premise that these individuals are net contributors (paying far more in taxes than they consume in services), and that their income and assets are largely non-UK and mobile, then the reality is simple: you either compete for them and treat them differently, or you lose them to jurisdictions that will.
- nobodyandproud 1y agoSome individuals are net assets. Many are not. If I bring in $2 billion in cash to a 100 person town in the US, with a median income of $40k: I can hire none, some, or all of them for $40k to $60k; and make the cost of living too expensive by buying up most of the land, to the point that the remaining stock will cost double or triple the cost. This is the majority of the oligarch class (Russia, China, Middle East, private equity) who’ve streamed into the democratic West and is an absolute net negative. Then you have billionaires like Musk (politics aside) who aren’t parking their wealth but building new industries; and the cost of living goes up because of the wages and perhaps demand, as more workers stream in (net positive). Then you have the rest of the billionaires (high finance, Amazon) whose method is wealth extraction through consolidation and off-shore labor (arguably net negative).
- regularjack 1y agoGood riddance
- cedws 1y agoI’m not even “rich” and yet thinking of moving myself and my assets somewhere else like Dubai. Why should I pay into a system I get virtually nothing out of? Furthermore my country took my freedom of movement in the EU away. That’s another incentive for me to leave - five years in Portugal and I get freedom of movement back.
- ewelme 1y agoDoesn't the billionaire Rupert Murdoch ultimately own the WSJ?
- wtcactus 1y agoMost comments on this thread go the way of: “You’ll own nothing and you’ll be happy.” When is enough going to be enough? Using the example of this article, the UK. There was a 70% increase in government spending during the last 10 years. Do you think that you are getting 70% better public services? Where is the government spending all our money? And what kind of propaganda is going on to make the people believe the answer is even more taxes?
- justlikereddit 1y agoNo one ever looks at taxes and says "hey guys between income tax, and VAT and other goods taxes we literally take more than 50% of the money that the entire lower and middle class is earning! This should be more than enough by a factor of two at the least to run our shitty bureaucracy and public services" Nope it's always "Who can we tax more? How to we steal more money for our shitty novelty projects and ideological madness" Anyone resource strong enough to leave, that usually is the upper class, will eventually do so. Leaving even more predatory taxation pressure against the lower social strata
- qgin 1y agoWhat if you target 0% inflation and instead tax assets at 2%? Same effect as “good inflation”, encouraging investment rather than hoarding, but it funds government rather than just devaluing the currency?
- hollerith 1y agoWorkers have an irrational dislike of their salary or wages ever going down. The main benefit to 2% per year inflation is giving employers a way to reduce real wages 2% per year during a downturn without the worker noticing.
- stuaxo 1y agoThis didn't happen, the only evidence is PR from one company https://taxjustice.net/press/millionaire-exodus-did-not-occur-study-reveals/ https://taxjustice.net/press/millionaire-exodus-did-not-occu...
- stuaxo 1y agoI love it when the fairy tail libertarianism of this website meets the reality of the UK.