'My clients are ready to pull the trigger': Britain's super-rich prepare to flee over fears of Burnham tax raids

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Speculation is mounting that the new prime minister and his chancellor, John Healey, could turn to taxes on assets to help deliver on the new government’s priorities, including providing extra cost-of-living support to families and financing an expansion in the UK’s social housing stock.

The new prime minister has indicated he is looking to deliver a greater level of “fairness” in the tax system, suggesting taxes on work are currently too high. This has led to suggestions that he could raise the rate of capital gains tax in line with income tax or possibly introduce a wealth tax.

Proponents believe that such taxes could provide significant additional revenue. Academics at the King’s College London and the Paris School of Economics recently estimated that a wealth tax on Britain’s super-rich could raise £10bn annually.

However, Burnham has been warned that such a move could drive investors away from the UK.

David Lesperance runs Lesperance Associates, a wealth management consultancy, and specialises in handling the finances of ultra-high net worth individuals. His clients tend to be entrepreneurs worth over £20m, many of whom have unrealised gains because their wealth is tied into the value of their companies.

“Since it became apparent that Starmer was going to be shown the door and since the election of Andy [Burnham], probably I've had 15 to 20 calls,” Lesperance told LBC.

He insists his practice is not alone in experiencing a surge in interest in leaving the UK, and says the additional uncertainty caused by a change of leadership and chancellor has “thrown petrol onto the fire”.

“I'm very active on LinkedIn with a group of other UK tax advisors who are all expressing a similar dramatic uptick in the number of their clients who are preparing for the possibility of significant capital gains and/or exit taxes in the Fall Statement.

“They’re worried about a pretty significant haircut if they remain in the UK - if there’s an exit tax or significant increases in capital gains.

Lesperance, who arranged for several ultra-high net worth individuals to leave the UK following the abolition of the non-dom tax advantages by Rachel Reeves in 2024, warns that some of his clients are now preparing to follow suit.

“It'll have an extraordinary impact on the coffers,” Lesperance explained.

“Whether somebody thinks it's fair or not, a progressive tax system like the UK is extraordinarily dependent on the top 1% of taxpayers for an extraordinary amount.

“If they're gone, that's going to have an asymmetric negative on annual tax revenues to be spent on the NHS and everything else,” he added, along with “a significant loss of employment, corporate tax, property tax, VAT on, on all their inputs for their business.”

“My clients are not waiting until the Fall Statement, whenever that's going to be… they are preparing themselves right now, preparing their businesses and them and their families to be able to pull the trigger between the Fall Statement and April.”

According to figures from HMRC, the top 1% of UK taxpayers pay around a third of revenue collected through income tax and capital gains tax (CGT).

Critics argue, however, that the rate of CGT is currently too low and should be equalised with income tax. Basic-rate taxpayers currently pay 18% for gains on assets, with that rate increasing to 24% for those on the higher or additional rate.

Yesterday, former Labour leader, Lord Kinnock, who Burnham cited as one of his political inspirations, told LBC’s Tom Swarbrick that there is a case for “spreading” the way tax revenue is collected more equally between income and capital gains.

“For some considerable time there has been room for spreading the tax base, not to what are described as working people, those people on earned incomes who go through pay as you earn in the conventional fashion, but [to] those people who take their income as capital gains.”

“If they were to equalise the capital gains and income tax rates,” Lord Kinnock explained, “you're talking about a £12 billion increase in resources.

“If simultaneously there was to be an announcement about reform of social payments of various kinds, or crucially, the report on social care was to be advanced and be financed wholly or partly by revenues from those who really truly can afford to pay, then people would understand they've got a government of greater efficiency, but also much greater equity, which is important.”

Shortly before entering Downing Street, Mr Burnham told LBC’s Andrew Marr that there is “some room” for movement on taxing in the UK without breaking Labour’s manifesto pledge on VAT, income tax and national insurance.

Burnham pointed to rebalancing business rates as an example of the changes that could be delivered under the current manifesto, and has also suggested increasing the personal allowance before people pay income tax to above the current threshold of £12,750.

Lesperance’s concern about the impact of people leaving the UK is echoed by Ian Cook, a financial planner at the wealth management firm Quilter Cheviot.

“Our research leads us to believe that the [number] of people considering leaving the UK has more than doubled over the last 12 months,” he told LBC, citing fears of tax rises and the introduction of a wealth tax.

Quilter Cheviot’s research, shared exclusively with LBC, suggests 26.8% of its investors are exploring moving out of the UK - up from 13.3% last year.

Only three European countries currently operate a broad wealth tax: Norway, Spain and Switzerland.

Others - including Germany, the Netherlands, Finland and Sweden - have previously attempted similar levies but have since repealed them, often citing administrative issues and capital flight.

“There's a number of other countries within the OECD that have tried and largely failed on these measures,” Cook continued. “The reason that they broadly failed is simply because it becomes very hard to value assets and actually collect some of that tax.

“What they actually found was for some of the countries, it was more punitive for them because in order to collect the tax, it was costing more than the tax that they were actually raising.

“That would be one of the key, the key challenges that if a wealth tax was introduced: How indeed would the UK government plan to actually collect those taxes, value the assets? That would be, that would be my major concern.”

The Treasury was approached for comment.