TLDR;
The video discusses the potential reasons why individuals in the UK should consider relocating, highlighting changes in the UK's tax policies and the possible introduction of a wealth tax. It covers the historical tax advantages of the UK, the impact of Brexit, and the implications of the removal of the non-dom regime. The video also suggests strategies for those who choose to stay in the UK to protect their assets, such as minimizing UK investments and using trust or foundation structures.
- The UK's tax competitiveness has declined post-Brexit.
- The removal of the non-dom regime is causing many wealthy individuals to leave.
- A potential wealth tax could significantly devalue assets.
- Strategies to protect assets include foreign bank accounts, residencies, and legal structures.
Introduction: Leaving the UK Before It's Too Late [0:00]
The video introduces the idea that individuals in the UK should consider leaving the country soon due to changing economic and tax policies. It notes that many people have already left the UK and discusses the reasons behind this exodus, what is likely to happen in the future, and how people can prepare or protect themselves. For those who choose to stay, the video suggests ways to safeguard their assets.
UK's Tax Competitiveness: Past and Present [1:28]
The UK was once known for its forward-thinking and tax-competitive environment, aiming to be the most competitive tax regime in the EU. This included a 19% corporate tax rate, which was significantly lower than rates in the US and below the EU average. The UK also offered ease of doing business, good payment processing, and less bureaucratic filings compared to some EU countries. The non-dom regime allowed residents who were not domiciled in the UK to avoid taxes on foreign income, attracting many individuals. Additionally, there was no exit tax, and sensible exemptions were in place for small businesses regarding transfer pricing rules and CFC rules. The UK's legal system was coherent and well-designed, providing objective and granular laws, such as the statutory residency test.
Brexit and Tax Changes [4:02]
After leaving the EU, the UK has seen negative impacts and has started raising taxes. The corporate tax rate for larger businesses increased from 19% to 25%, and the non-dom regime was eliminated. The removal of the non-dom regime has led to many people leaving the UK, as they could previously avoid or minimize taxes on their income. While some argue that those who weren't paying taxes anyway aren't a significant loss, the departure of these individuals is notable because the UK was favored due to these rules.
Concerns About Exit Tax and Wealth Tax [5:10]
Two major concerns in the UK are the potential introduction of an exit tax and a wealth tax. Currently, the UK does not have an exit tax under certain conditions, allowing individuals to move abroad without being taxed on their assets after five years. However, there are discussions about implementing an exit tax now that the UK is no longer in the EU. Additionally, there is a growing movement for a wealth tax, which could be significantly destructive to wealth. The objective of this movement is not just to tax wealth but to devalue assets so that more people can afford them, which the speaker believes is a terrible approach to broadening capital ownership.
Strategies for Leaving the UK [9:13]
Given the potential for wealth destruction, the speaker suggests that now is a good time to consider leaving the UK. There are numerous alternative destinations, including the UAE, various locations in Europe, Southeast Asia, and Latin America. The key is to find a place where wealth is less likely to be destroyed.
Protecting Assets While Staying in the UK [9:57]
For those who choose to stay in the UK, it's important to protect the value of their assets. This involves minimizing investments in the UK and investing in places less prone to wealth destruction. Structuring assets to avoid wealth tax typically involves using trust or foundation structures, which are complex and require a thorough understanding of the laws. Setting up these structures and shifting assets into them before their value increases can provide optionality and maneuverability in the future. The speaker emphasizes that having foreign bank accounts, residencies, legal structures, and assets is crucial for individuals with a sizable amount of money.