As the Halloween horror Budget looms on October 30, many wealthy Britons are looking to quit the UK. The exodus began under the Tories, who drove UK taxes to the highest level in 70 years.
Last year, 4,200 millionaires left the country. With Labour in charge, that’s expected hit 9,500 this year, according to Henley Private Wealth.
Many will say good riddance. The “bash the rich” mentality is growing stronger by the day, under Labour rule.
The problem is they’ll take their money with them, leave a gaping hole in the nation’s finances that the rest of us will have to plug.
Currently, it’s easy to leave the UK. Entrepreneurs and investors pay no capital gains tax (CGT) on UK shares if they leave Britain for more than five years.
So they can clear off if they like. It’s a free country, after all.
Now left-wing think tank the Resolution Foundation is calling for Labour to slap a CGT-style exit charge on departing Brits, to rinse them before they leave.
Is this a good idea?
Helpfully, one advanced European economy has drawn up an exit tax, allowing us to see how it would work.
This oil-rich nation boasts one of the strongest economies in the world, and one of the strongest and most stable currencies. Not anymore.
The country in question is Norway. The Scandinavian social democratic land is way wealthier than the UK. Average salaries are 50% higher, and as any Brit who sets foot in the country will testify, it’s bloomin’ expensive.
At least, it was.
These days Norwegians are the ones complaining about prices, while foreign tourists are flooding in because the country’s currency has collapsed to a 50-year low.
Norwegians who used to flood into London laughing at how cheap the beer is, are now crying into their costly pints.
Ironically, Norway has a Labour government too. The collapse happened on its watch.
Some blame the falling oil price, which cuts the value of the country’s ample energy exports, but the krone’s decline began while oil was still relatively pricey.
So what’s up?
Norway is one of a handful of countries to have a wealth tax. Which is something many on the left want Starmer to introduce.
Yet it hasn’t worked out well for Norway. Although the maximum rate is just 1.1%, that’s taxed on people’s entire wealth, including their businesses.
So someone who owns, say, a £40million business could face an annual tax bill of £440,000. And they have to pay even if the business makes a loss that year.
Norwegian entrepreneurs have been fleeing in droves. Thirty of the richest Norwegians now reside in Switzerland.
Instead of relenting, the Labour government is doubling down by lining up a new and more stringent exit tax to punish people for leaving the country.
Any Norwegian who leads the country now has to pay capital gains tax on shares and they don’nt have to be wealthy to pay. Anyone with more than half a million krone (£35,700) will get stung.
But that isn’t enough for Norwegian Labour. Now it’s planning a brutal new exit tax, too.
Which is only accelerated the exodus.
Worse, it’s making the country a less attractive place to build a business. Foreign investors now want nothing to do with it.
Norway will survive. If it’s short of cash, it can simply pump out more oil and gas.
But an exit tax would be a disaster for the UK.
We don’t have endless oil supplies and even if we did, energy secretary Ed Miliband would shut them down in a flash.
Instead, we rely on foreign capital and entrepreneurs hungry to build businesses. Labour’s autumn tax raid is already scaring them away.
An exit tax would sink us for good.
We should thank Norway for the economic lesson. Let’s hope our Labour Party is paying attention.
