According to the Financial Times, many wealthy individuals in the UK are getting rid of various assets, including shares and property. Wealth managers across the country are reporting increased activity among their wealthy clients, who are bracing for a potential increase in capital gains tax.
According to the newspaper, financial planners say the sales wave covers a diverse range of clients, from company executives to entrepreneurs. Speculation is swirling about the possible financial policies of the Labour Party led by Keir Starmer if it wins the July 4 election.
“We are seeing a number of clients concerned about the potential increase in capital gains tax,” Toby Tallon, a partner at Evelyn Partners, told the Financial Times. Tallon noted that many clients are offloading assets, particularly those who need immediate liquidity, while others are taking a cautious “wait and see” stance as they await the outcome of the election.
Nick Ritchie, senior director at RBC Wealth Management, also interviewed by the FT, echoed these sentiments, highlighting “general nervousness” over the uncertainty surrounding Labour’s tax policies. A minority of clients have already sold assets to ensure their profits are taxed at the current 20% rate, fearing future increases, he revealed. Ritchie also warned of a potential mass exodus of wealthy individuals seeking to avoid higher taxes, which could lead to a damaging “brain drain” for the UK economy.
Andrew Shepherd, chief executive of Brooks MacDonald Wealth Management, warned the Financial Times that such a move “would likely deter investment in the UK at a critical time for the economy”. Shepherd stressed that client requests for information typically increase during election periods, as people seek guidance on how new policies might impact their financial strategies.
The Conservative Party has pledged not to raise capital gains taxes.
The Labour Party, which is seeking to reassure the public, stressed that its plans do not include additional tax increases.
“We have put forward fully budgeted and funded plans, with very specific financial gaps that we will work to fill,” a party spokesman said.
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