UK Budget to trigger an exodus of assets out of Britain: deVere CEO
The UK Budget next week is likely to trigger an exodus of assets out of Britain, warns the CEO of one of the world’s largest independent financial advisory organisations.
The stark warning from Nigel Green of deVere comes as finance minister Rachel Reeves is dealing with a considerable black hole in the public finances which demands major action to restore fiscal sustainability, but has to reckon with Labour’s pledge to leave the ‘big three’ taxes alone.
With limited political space and a deteriorating fiscal backdrop, markets expect the chancellor to lean heavily on the tools she can touch: frozen thresholds dragged out further, tightened reliefs, new bases for existing taxes, and fresh obligations on income streams previously untouched by National Insurance.
Nigel Green says: “Every indication points to a Budget built on a patchwork of tax hikes that raise the overall burden without altering some of the headline rates.
“A freeze that runs for years becomes a tax rise in everything but name. People feel it the moment they drift into higher bands, lose allowances or face limits that no longer reflect real-world prices.
“The UK is edging toward the point where the effective burden crosses the line of tolerance.”
The income-tax threshold freeze is already pulling millions into higher rates through fiscal drag, and extending it toward the end of the decade would generate billions more.
The same dynamic applies to inheritance tax, where a long-running freeze on the nil-rate bands is pushing more estates into liability as property prices have climbed.
Property taxation is expected to form another pillar of the chancellor’s revenue plan, with discussions around expanding top-end council-tax bands, restricting capital-gains exemptions on high-value homes and revisiting how second homes are treated. Rental income could also be swept into National Insurance, a move that HMRC could implement efficiently under the incoming digital-reporting system.
Nigel Green warns: “This is exactly how asset migration begins – not in a single headline measure, but in an accumulation of decisions that raise the friction on savings, property and investment activity.”
Pension tax relief is under renewed scrutiny too. While large structural cuts are politically difficult, Treasury officials are assessing options that generate revenue without overtly breaking manifesto language.
A levy on pension-fund values is being discussed as a mechanism that would collect billions with minimal administrative cost.
CGT changes are also on the table. A small rise in rates or revised treatment of gains on departure from the UK could be used to pull revenue forward, even if longer-term yields fall – a behavioural effect long recognised in fiscal modelling.
The chancellor may avoid the more aggressive options, but markets expect at least modest tightening.
The deVere CEO says: “When a government relies on a smorgasbord of hikes — freezes, narrowed reliefs, new NIC liabilities, pension tweaks and property adjustments — it becomes clear the objective is revenue extraction rather than growth.
“This is when capital flows elsewhere.”
The UK’s position is acutely sensitive to this shift. Internationally mobile investors, entrepreneurs and high-value savers weigh jurisdictions against each other constantly. Lower-tax locations across Europe, the Gulf and Asia are already seeing increased enquiries as Budget expectations harden.
He adds: “This is the classic Laffer-curve problem. Push the burden too far and the base you are taxing begins to shrink.
“If people re-domicile their investments, pensions or savings, the Treasury loses revenue just when it needs it most.”
With debt servicing elevated, growth weak and fiscal rules tightening, the chancellor appears set to raise the overall load through multiple channels at once.
This approach may close the gap on paper, but it risks accelerating the very behaviour the Treasury fears — the movement of capital, assets and long-term savings out of the UK.
Nigel Green concludes: “A Budget built on a series of tinkering hikes will not strengthen the country’s finances. It drains the foundations by driving wealth, investment and opportunity to more competitive jurisdictions.”
“The Budget is likely to trigger an exodus of assets out of the UK.”