FOR ultra-wealthy entrepreneur Bassim Haidar, living in London has become an expensive indulgence he can no longer justify.
While new British Prime Minister Keir Starmer settles into No. 10 Downing St, Haidar is searching for homes in Greece and Monaco, because a proposed inheritance tax revamp will make Britain a "no go" zone for the rich, he says.
Starmer says the overhaul will make Britain's tax system fairer and raise funds for stretched public services.
While supportive of some reform, Haidar says the proposed changes could harm the economy if international business owners choose to quit Britain, or avoid moving here, undermining its reputation as an incubator for fledgling firms.
The recently ousted Conservative government outlined surprise plans in March to phase out Britain's centuries-old non-domiciled (non-dom) tax regime, which spares wealthy individuals from paying tax on income earned overseas.
But in the run-up to its July 4 election win, Starmer's left-leaning Labour party pledged to also scrap permanent reliefs non doms born outside the United Kingdom could obtain if they put non-UK assets into a trust within 15 years of moving to Britain.
Haidar wants Starmer and Finance Minister Rachel Reeves to rethink these plans, and to replace them with a new six-figure annual tax on people with net worth in excess of five million pounds.
Haidar estimates a £150,000 levy could raise an additional four billion pounds a year for the government, boosting state coffers without triggering an exodus of the non-dom wealthy.
"The notion that the UK is simply too good to leave is incorrect," the 53-year old Nigerian-born, Lebanese citizen said.
"To be taxed so heavily on wealth generated outside Britain, perhaps years before people even moved to the UK, is unfair," he said, urging the government to sit down with globally mobile millionaires and discuss tax reforms.
Organisations like Patriotic Millionaires UK are also campaigning to introduce annual wealth levies on the super-rich.
Setting a two per cent tax at a threshold of £10 million a year would impact around 20,000 people, but raise up to £24 billion a year, the group estimates.
Investment firms, wealth managers and private bankers who provide financial services to around 70,000 UK-based individuals with non-dom status are on high alert for when the historic tax overhaul might begin.
The Labour government reckons it can raise an extra £5 billion a year by tackling domestic tax avoidance. Assessing how much more could be raised by changing tax perks on offshore trusts is more difficult.
"It is not possible to directly measure how much foreign income non-dom using the remittance basis have, and therefore what the potential tax base is," the independent Institute for Fiscal Studies (IFS) said in a report published in March.
Inheritance tax raised £2.1 billion between April and June, £83 million more than the same period a year earlier, UK tax authority data last week showed.
Britain has around 37,000 non-doms who opt to be taxed on a 'remittance basis'. This means UK taxes are not charged on their foreign income or capital gains unless they are remitted to the UK.
According to the IFS, those people collectively paid about six billion pounds in UK income tax, National Insurance contributions and capital gains tax in 2020–21.
Some wealth advisers say London's status as a culturally diverse city with world-class schools will ultimately persuade the well-heeled to acquiesce.
But a desire to shield his family wealth far outweighed the inconvenience of moving to another country, Haidar said.
Britain is likely to lose nearly one in six of its US dollar millionaires by 2028.
A Swiss bank cited the high base number of super-rich in the UK, the implications of the Russia-Ukraine war and the lesser effect of Britain's decision to abolish its 'non dom' tax perks as reasons for the sharp fall.
UBS forecast the number of dollar millionaires in Britain would fall by 17 per cent to around 2.5 million in 2028.
In contrast, the total number of dollar millionaires in the United States and in France was forecast to rise by 16 per cent by 2028, in Germany by 14 per cent, in Spain by 12 per cent and in Italy by nine per cent.
* The writer is from Reuters