Reeves ditches plans for exit tax on wealthy people fleeing Britain
The decision comes after the Chancellor was warned by 150 business leaders
Chancellor Rachel Reeves has reportedly axed plans for an "exit tax" on the wealthy.
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The Chancellor had been ready to impose a new levy on entrepreneurs moving their money away from the UK but has since ruled it out after accepting it could lead to an exodus of millionaires fleeing the country.
A source told The Telegraph the exit tax could potentially set a warning to others that the UK is "less welcoming" to entrepreneurs.
Ms Reeves was reportedly hoping to raise £2bn from the leglisation, which would have helped fill a £30bn hole in public finances, before backing down.
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A source close to the Chancellor said: "This is a pro-business government which is building on the progress we’ve already made to strengthen the UK's position as an attractive investment prospect for the best and the brightest across the world.
"Introducing an exit charge would risk signalling that the UK is less welcoming to entrepreneurs and global talent, and that’s not something the Chancellor wants to do."
As it stands, emigrants can sell their assets in Britain without incurring capital gains tax (CGT), which is set between 18 and 24 per cent.
The move would have brought Britain in line with nations including Germany, Norway and Belgium, who have all recently imposed more stringent settling up taxes.
Last week, 150 business leaders wrote to the Chancellor to warn her off, claiming the tax would “not only tell founders that their ideas and innovations aren’t welcome, but that they should either get out early or not come at all."
On Tuesday, it was revealed Herman Narula, Britain’s richest self-made entrepreneur aged under 40, was preparing to quit the UK for Dubai over the exit tax plans.
One figure on the Labour Left told The Telegraph: "The idea that the Budget will tax workers but effectively protect wealth is a long way from the kind of fairness we expect from a true Labour Government. Unacceptable."