Squeeze on Britain's rich dents demand for high-end property, real estate group says
10/07/2024 11:22
LONDON, July 10 (Reuters) - British real estate group
Winkworth said on Wednesday demand for high-end properties had
been dented by tax policies targeting wealthy individuals and a
proposal by the new Labour government to tax private schools.
Britain's tight national finances have for some time meant
there is little scope to invest government money in improving
its ailing public services. This has pushed successive
governments to focus on whether they can raise more taxes from
those who have chosen Britain, and often its high-returns
property market, to store their wealth.
With the new Labour government promising to tighten tax
loopholes that often benefit the super-rich, private banks and
advisers have said that some may quit the country altogether.
Winkworth said in a trading announcement for the first half
of 2024 that overall sales had risen 19% versus H1 2023, but
that there had been some impact on the higher end of the market.
"A combination of the Conservative Party's removal of
non-domiciled status, the Labour Party's stated intention of
adding VAT to private school fees, and the higher cost of
finance have weighed on this sector," the statement said.
Labour, whose election victory last week had been widely
anticipated, intends to remove an exemption for non-state run
schools which currently means they do not have to charge a 20%
Value Added Tax (VAT)on the fees they receive.
Such schools are often favoured by the wealthy, but could
now become more expensive.
In March the then-Conservative government said it would
phase out a "non-dom" tax status that benefits at least 80,000
people who live in Britain but pay little or no U.K. tax on the
money they earn overseas.
Labour has gone further, promising to end the use of
offshore trusts that can be used to avoid inheritance tax.
Data published by the government on Tuesday showed non-doms
were liable to pay 8.9 billion pounds in income, payroll and
capital gains taxes in the 2022/2023 tax year.
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Britain seen losing sizeable chunk of millionaires by
2028-report ID:nL1N3J2094
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(Reporting by William James; Editing by Angus MacSwan)
((william.james@thomsonreuters.com; @wjames_reuters; +44 20
7513 4401;))