Tax
EDITORIAL COMMENT: Let's Have Consistency In How HNW Individuals Are Treated

The UK government reportedly favours high-earners and persons from certain countries under a new immigration regime after the country quits the EU. But how does this fit with other policies on tax?
(This item is published across the WealthBriefing family of newswires as citizens living in multiple regions could be affected by the UK government's proposals.)
The UK government is reportedly thinking of favouring
high-earners and those from particular nations – many of them
English-speaking countries – as it rejigs immigration policy
ahead of Britain’s departure from the European Union.
Whatever the merits of such a policy post-Brexit (this
publication does not take an editorial view on Brexit) there
appears to be a lack of “joined-up thinking” when it comes
to making the UK more appealing to wealthy people.
To explain my point, a few days ago, Prime Minister Theresa May’s
government suspended the country’s
Tier 1 Investor Visa programme (available to those willing to
pass over at least £2 million ($2.53 million)), with a view to
possibly reinstating it in a few months’ time. While there have
been legitimate compliance concerns about these “golden visa”
programmes in certain nations, the move came as a jolt. The
present Conservative government has hiked stamp duty on property
deals, gone after foreign-owned property structures, and
tightened the screws on the tax treatment of resident
non-domiciled individuals. The top rate of income tax is 45 per
cent, which may not be as eye-watering as in some countries, such
as in France, but it is still hitting a lot of earners. (Compare
that rate with those in the 20s, such as in Singapore or Hong
Kong.)
The wealth management sector will obviously want to see affluent
people encouraged to work in the UK, but it is also worth noting
that the sector needs people with skills too – and not all of
those are on large salaries. Entrepreneurs may not have a lot of
cash but their ideas could be lucrative in the future. A
constructive policy post-Brexit should ensure that the UK
welcomes not just wealth, but talent and a work ethic, whether
the UK adopts a “soft” exit (remaining in the Customs Union and
retaining many other structures of the EU) or a “hard”, “clean”
Brexit (leaving under World Trade Organisation membership terms).
Many entrepreneurs have started out being poor and have escaped
from oppressive regimes, and the UK has a record of opening its
doors to them. It is not just the smart thing to do, it is also
the right thing to do.
Details at this stage remain sketchy, and of course any comment
about government policy consistency needs to bear in mind that if
a Labour government under its current hard-left leadership takes
over, tax treatment of anyone deemed affluent, foreign or
domestic, will be harsher.
For the moment, however, reports (Bloomberg, 17
December) on what is being proposed in
Whitehall say that the government preference under the
new passport regime “will be given to higher earners and people
from favoured nations”. These nations are likely to be places
whose citizens use e-passports to enter Britain: Australia,
Canada, Japan, New Zealand and the US. To some degree, this looks
like a sort of “Anglosphere” migration policy, part perhaps of a
wider change in how the UK engages with the world in future.
Of course, expecting total consistency from policymakers about
immigration policy or indeed anything else might seem a
bit naïve. Even so, if the UK does want to signal that this
country is very much open for business post-Brexit, and indeed
intends to be even more global in its outlook, all parts of the
state apparatus need to be pointing in the same direction.