Briefing: exit taxes

Overview:

  • Capital gains tax has increased substantially in recent years with an almost 50 per cent rise between 2019-20 and 2023-24 in receipts, increasing from £9.8 billion to £14.5 billion.
  • Calls have recently been made for the introduction of an exit tax. Generally, this applies to the realised gains of assets of an individual upon leaving a country and changing where they are resident.
  • International experience shows the complexity of implementing an exit tax, with little consistency of rules and susceptibility to being changed regularly.
  • Some British Overseas Territories and other tax havens would likely benefit from a UK exit tax, but this would be to the disadvantage of future foreign direct investment into the UK.
  • The chancellor in the October 2024 budget should commit to not introducing an exit tax during the rest of this parliament and lay out plans to reduce taxes on capital.

 

READ THE BRIEFING NOTE

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