The U.K. closed a tax loophole for the global rich, now they're fleeing

People earning 90k aren’t “the rich” that are doing the most egregious tax avoidance. They’re still working class. They still have to work or face destitution.

The very top sliver who own the majority of the land and assets and who never need to work a day in their life are who must be looked at; that hereditary wealth needs to begin to find itself flowing into public services more and more.

> IIRC earning 90k per year puts you in the top 1%.

According to the public data for 2023-2024, top 1% is around £180-200k, so you're off by quite a bit. £90k is around 5-6%. This is gross, not net.

In the U.S., the top 1% is around $570-600k according to 2024 census numbers.

“As you pay more tax, you get less services”

This is a lie. In US, most food our rules, legal system, government agencies (that are not direct transfers like doc security & Medicare) exist to protect properties and interest of the rich.

That higher income people are not seeing much of direct transfers does not mean they are not getting more benefits from the government. Even our bloated military and foreign policy is primarily still protecting US business interests globally. It’s not minimum wage peon that benefits from that. It’s owners of large capital

The rich generally derive their wealth from the labours of a healthy and educated population. In most Western countries, these are proceeded at least in part paid by taxes and amount to a massive subsidy to those who need labour. Arguably this includes the "free childcare" mentioned above.

Yes. Progressive taxation. That's the point. Tax those who can afford it, fund equal opportunity and a basic standard of living for those who can't. Pull society up from the bottom.

As much as one can complain about specific inefficiencies or not being able to send young Jasper and Tabitha to private school because of VAT and tapered tax relief, I do think we don't take it far enough.

The reason it not working is that we have stapled our personal wealth and economy to housing. 60 years of financiers pushing for higher lending limits with looser regulation resulted in more people able to "afford" a £1m house. That drags up all the prices.

There's no simple way to reverse it this distortion but it had a knock on effect: the generationally rich, the landed gentry through to farmers have become insanely rich, through no work but HODLling all the land until they got planning permission.

I agree, wealth tax is scary but not addressing how wealth works won't fix things either.

Switzerland does it and my understand is they basically just ask you to fill in a tax return every year and say how much wealth you have (all the assets you own).

Presumably they do have a department of people checking this to make sure people aren't lying, but also Switzerland is a relatively high trust society, and taxes are reasonable, so people probably don't mind paying too much.

In the UK in 2025 I'm not sure this would work, people would try and evade it and the UK government isn't competent enough to stop them

I think by "asset" OP actually means "real property", otherwise the subsequent statement of "if you own most of Mayfair, you can't just move your assets elsewhere - they are very clearly tied to the location" doesn't really make sense. You could easily move corporations around, for instance, so the statement is only really true when applied to real estate.

I think The Netherlands has it running quite OK.

You don’t need new govt. dept. tax authority is enough. You do your yearly tax statement.

In NL they have access to your bank accounts or more like banks and brokers are obliged to provide state of accounts as per 1st of January.

Downside is you pay wealth tax on „possible gains” not actual gains on wealth above 40k€. If you have mortgage it of course is deducted from value of your house or any debts that you have documented.

In case you think collecting watches can make you hide the wealth, there are of course tax authority checks most likely if your wealth suddenly changes.

My answer to this (good) question is: do whatever banks do to value illiquid assets when they lend against them (this is how the wealthy largely have cash at all), then levy taxes accordingly. Hell if you want, add the taxes to the interest rate.

Just tax land and you'll get 80/20

I don’t think the wealth taxes, fundamentally workable because you have issues you raised above, but other things like liquidity and indivisibility of assets.

I think the simpler solution if simply passing along the original cost basis to heirs (and without documentation it’s assumed to be zero). That way people or even families can defer taxes on income, but eventually they get paid.

The UK has council tax, which is quite similar to a property tax

Yeah but they have No Income tax right?

There's been a big shift of rich people avoiding taking pay or dividends. Instead they get paid in stock, and then get interest free loans secured on that stock to actually spend money.

It's a loophole the mega-rich are using to avoid tax.

The other thing that's happened is that a lot of the mega-rich have lobbied to gradually chip away at inheritance taxes. So again they just pass the asset, paying a fraction of the taxes they'd have paid had they been a "normal" tax payer.

And one of the big things they've got? No capital gains on those stocks when passed to children.

So yeah, we need to tax assets as well as income. Because anything that's not taxed the rich just funnel money into it to avoid paying tax.

It'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!

Privatisation and attacking social security does not work, it just makes the wealthy even wealthier.

Not the solution is fair taxation every trade made in the country, if you make business in a country you need pay taxes there for the transactiona made there.

Otherwise you just extract value out of the country, without giving back.

To me there is no worse thievery than tax evasion, it's literally robing a nation.

Why do so many people think that cutting social safety nets is a cheat code?

With the exception of certain pension benefits there isn't much money flowing into these programs to begin with.

> The UK needs to radically reduce its social safety net and simultaneously cut taxes, at least for new companies and small businesses. The only way out is real, sustained, long term growth and innovation. Stealing ever more of a shrinking pie is already running out of steam.

I was under the impression they had done that already.

https://en.wikipedia.org/wiki/United_Kingdom_government_aust...

Though one can't help but think it wont be radical enough for conservatives until we simply dispose of those unable to work through some dystopic mechanism or other.

Oh wow I had no idea OnlyFans is from UK. Always thought it was US.

>The UK needs to radically reduce its social safety net and simultaneously cut taxes

Unfortunately that is not a popular opinion in the UK. They want to tax everything, taxing the rich is popular among voters which is why they are doing it. And again the consequence have long been known or told. They are doing it anyway.

Most of the street in London is empty. UK is either number 1 or number 2 in millionaires fleeing the country after China. Property pricing are falling somewhat not because of more supply but because those asset are being sold as part of those moving abroad.

> Non domiciled are roughly 0.11% of UK residents and pay about 1.24% of UK taxes

It's curious that the percentages used to defend not taxing the rich (whether they are UK citizens, or operating as "non-doms") tend to be what percentage of the tax burden they pay. But it's never what percentage of their income and capital gains they pay as tax.

I think the latter is a fairer representation, considering we have a progressive taxation system. Someone who is earning over £125k a year should be paying close to 45% of their income and capital gains.

The question is: are they? If not, why not?

So what you are saying is, it eventually trickles down?

edit: The reality is they don't spend enough for it to offset the harms that wealth inequality brings.

I know a couple of people who have been using this London loophole as a way to avoid paying taxes anywhere at all. They are not residents here, they are not residents there, and their income is earnt globally. So they think they shouldn't have to pay tax to any particular country.

They don’t need to be there to employ people, and they don’t spend as much as most people do as a portion of their income or wealth.

That's just arguing trickle down economics, which has a decades long story of failure.

Are they? Or are they there to outcompete ordinary people for houses, labour, etc?

We don't need a bigger market for luxury dog sitters or sports car manufacturing, better allocate those resources for childcare, elder care, or other chronically understaffed fields.

There are plenty of people with money, who do pay taxes, who can start those businesses. We don’t need trickle down economics in order to function as a society.

And if they just pay tax like everyone else, even more tax!

I employ people and I am not a billionaire. I also pay my taxes. Crazy I know.

"slightly more indirectly" is an interesting way to say "by distorting local economies and politics around the idiosyncratic needs and desires of a very small number of uber-wealthy foreigners."

I 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)

It'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.

if 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?

I’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.

This 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.

In 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.

Not 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.

I live in europe, and I would be breaking the law if this would true. Would love to see some citations.

It's only the US which taxes worldwide income. It's not true for rest for the world.

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Not 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