Future UK government needs to get the tax rules right
Dubai-based Andrew Young, Group Director of Opus Private, shares his opinion about what could UK General Elections mean to wealthy foreign investors:
I think there is ‚Äélow awareness overseas of the fact the forthcoming UK election could bring in a government of a very different hue, possibly very unsympathetic to wealthy inward investors.
There is already an awareness that the UK is less tax friendly to inward investors, yet this has caused only a softening of interest due to the UK’s other perceived advantages.
Wealthy foreign investors are not averse to paying some tax in the UK, but they do object to being specifically targeted by tax rules that do not remain constant, e.g. recent changes to SDLT or to the annual charge on non doms. The overall net “benefit” these people bring to the UK economy in terms of investment, spending, and jobs, seems reasonably clear. Any attempt to tax them in what is perceived as an unfair way, and which may deter them from investing in or coming to the UK, can perhaps only be explained by a perception that such measures are popular with voters. And maybe they are, as envy of the rich man in his castle is still a part of the national psyche.
Ultimately though, such people and their capital are highly mobile, and there may come a tipping point when such inward investors will be more inclined to look elsewhere than the UK.
The election seems too close to call and opinion seems to point to a further coalition of some sort.
On balance, the present government have done a fair job in repairing broken finances but there is still a way to go. My expectation is that the electorate may be inclined to give them another term, but the many different permutations make the actual outcome very uncertain.