‘Given that the UK government is desperate for money now, Nick Cleggs announcement seems like purely political posturing’
Mark Summers, Partner at Speechly Bircham, comments on Nick Clegg’s proposed new wealth tax:
‘If it is genuinely a wealth tax it would take quite a few years to implement as there would be a need for entirely new legislation. A methodology for valuing assets and means of reporting would also need to be developed, which would take time.
‘Given that the UK government is desperate for money now, Nick Clegg’s announcement seems like purely political posturing. It is therefore very doubtful that a new tax could be introduced this side of a general election. I would question whether the Liberal Democrats have any idea how much they could actually raise with such a tax as set against the costs of implementation and collection.
‘The experience in France has been that wealth tax simply drives the wealthy out of the country.
‘There is also a question as to how it would apply to UK resident non-domiciliaries. If it would only bite on UK assets you can foresee non-domiciliaries leveraging or structuring UK assets in order to mitigate the tax.’