'Exit Tax' - Labour Planning An Even Bigger Mistake Than Usual?

 Controversial ‘exit tax’ has sunk this wealthy European nation - now Labour wants it. here

PM Keir Starmer is being urged to slap a punitive "exit tax" on Britons who flee overseas to escape Labour's tax raids. One European country has already tried this policy, and it's backfired horribly.

By HARVEY JONES

09:03, Tue, Sep 17, 2024

It's a lot cheaper to visit Bergen in Norway with the krone at a 50-year low against the pound (Image: Getty)

As the Halloween horror Budget looms on October 30, many wealthy Britons are looking to quit the UK. The exodus began under the Tories, who drove UK taxes to a 70-year high.

Last year, 4,200 millionaires left the country. With Labour in charge, that’s expected hit 9,500 this year, according to Henley Private Wealth.

Many will say good riddance. The "bash the rich" mentality is growing stronger by the day, under Labour rule.

The problem is they’ll take their money with them, leave a gaping hole in the nation's finances that the rest of us will have to plug.

Currently, it’s easy to leave the UK. Entrepreneurs and investors pay no capital gains tax (CGT) on UK shares if they leave Britain for more than five years.

So they can clear off if they like. It’s a free country, after all.

Now left-wing think tank the Resolution Foundation is calling for Labour to slap a CGT-style exit charge on departing Brits, to rinse them before they leave.

Is this a good idea?

Helpfully, one advanced European economy has already done just that, allowing us to see how it would work.

This oil-rich nation boasts one of the strongest economies in the world, and one of the strongest and most stable currencies. Not anymore.

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The country in question is Norway. The Scandinavian land is way wealthier than the UK. Average salaries are 50% higher, and as any Brit who sets foot in the country will testify, it's bloomin’ expensive.

At least, it was.

These days Norwegians are the ones complaining about prices, while foreign tourists are flooding in because the country's currency has collapsed to a 50-year low.

Norwegians who used to pile into London laughing at how cheap the beer is, are now crying into their costly pints.

Ironically, Norway has a Labour government too. The collapse happened on its watch.

Some blame the falling oil price, which cuts the value of the country's ample energy exports, but the krone's decline began while oil was still relatively pricey.

So what's up?

Norway is one of a handful of countries to have a wealth tax. Which is something many on the left want Starmer to introduce.

The Norwegian Labour Party hiked the top rate in 2022, making the richest pay more.

Yet it hasn't worked out too well. Although the maximum rate is just 1.1%, that's taxed on people’s entire wealth, including their businesses.

And people have to pay it every single year.

So someone who owns, say, a £40million business could face an annual tax bill of £440,000. And they have to pay even if the business makes a loss that year. Express.