New government risks to become too greedy in seeking to tax non-residents
Stephen Whale, Group Director ‚Äì Private Client Services of JTC Group gives his opinion on the dangers of an anti-wealth legislation that the new government could implement after elections.
How do you think the election campaign may affect how London is perceived by WM clients?
The election looks as if it is too close to call at the present time and so there is a high degree of uncertainty surrounding the result. Generally, private clients do not like uncertainty. From our perspective, the area most impacted is the UK property market where we have seen a slight reduction in demand for international investors wishing to purchase UK property.
What do you think about the Crown dependencies being brought into the political debate about Wealth?
A lot of this debate is political rhetoric. Most of the people who use offshore centres are not voters in the UK and so there is nothing to be lost in political terms by attacking offshore centres. The political parties do not appear to be interested in a genuine debate about inward investment into the UK or what might reasonably constitute “a fair share‚Äù in tax terms.
What do you think will be the result?
I am not sure there is much else the UK government can do. The Crown Dependencies in particular are better regulated and adhere more rigorously to, for example, anti-money laundering legislation. However, there are always anti avoidance initiatives that the UK Government can implement and no doubt we will see more of those after the election.
What risk and upside do you see?
One risk is that the UK Government becomes greedy in seeking to tax non-residents who, for example, invest in UK property. This might lead them to look for alternative investments away from the UK. This is not desirable because these people are big spenders and net contributors to the UK economy as opposed to being a drain on resources. The upside is that because of the Crown Dependencies’ excellent reputation in the sphere of wealth management, many wealthy individuals are looking to use the expertise and experience of service providers based there in a world which is ever more complex and compliance orientated.
Would you say it is a foregone Conservative conclusion?
No, the opinion polls at present suggest that the election will be a very close call.