Efforts to protect wealth should Labour take power are being stepped up
JEREMY CORBYN may have it in for tax havens, but they are not all cursing the Labour leader right now. Well-heeled types worried about the prospect of a Corbyn-led government have been buying property on Guernsey with a view to relocating to the island, attracted by its flat 20% income-tax rate and lack of capital-gains or inheritance taxes.
Such fears have fluctuated in line with recent political turmoil. Wealth advisers interviewed for this article agreed that clients worry more about Mr Corbyn than Brexit—though the two are linked, as some fear a disorderly Brexit precisely because it could usher in a Labour government. When clients of Saunderson House, a wealth manager, were asked last October what was the biggest threat to their finances, the top answer, mentioned by 42%, was a change of government.
The third category—and the biggest bogeyman—is the spectre of capital controls, measures to restrict the flow of capital in and out of the country, in the event of severe economic turbulence. Labour has repeatedly denied it would consider such a draconian measure, last seen in Britain in the late 1970s. Even Mr Corbyn’s harshest critics see it as a long shot. Nevertheless, contingency plans are being put in place.
Among those who may be tempted to up sticks are resident “non-doms”: foreigners who live in Britain but declare their domicile as elsewhere to avoid tax on their non-British income. The Tories took away some of their privileges in 2016, after a media outcry over their cushy deal, but the non-doms still get fairly generous treatment for up to 15 years. The threat of a Corbyn government, though, is leading some who were wavering after the changes in 2016 to go elsewhere.
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