London has few competitors as a financial and lifestyle hub
Dominic Tremlett, head of UK private banking for Lombard Odier, says greater tax harmonisation with other countries and long-term horizons from policymakers would be useful from the Government.
All European governments are seeking increased transparency and fiscal accountability for their residents. However, despite efforts by offshore centres to show their value to the UK economy, this seems a difficult message for politicians to accept. The trust industry has responded, quite logically, by diversifying into emerging markets where there is a higher level of wealth creation.
UHNW individuals contribute to the economy through their specialist skills, the tax paid by their businesses, and the 45% levy many pay on their own earnings. The rule changes for ‘non-domiciled’ individuals show that the government is not courting UHNW individuals to improve the public finances. Eye-catching measures like raising the inheritance tax threshold on the family home and for the 40% income tax band speak instead to a desire to win votes from middle England.
Despite the new nom-dom rules, the UK still offers a good tax regime for high net worth clients for fifteen years. While some non-doms will leave, many will stay and pay the additional tax for personal, family or business reasons. Meanwhile, volatility and insecurity in emerging markets will continue to drive wealthy clients from around the world to the safety of London. The city has few competitors as a financial and lifestyle hub.