The study, carried out by wealth manager Saltus, found that high net worth individuals (HNWs) are braced for potential hikes in capital gains tax, income tax and inheritance tax, with many citing the imposition of VAT on private school fees as a tipping point.
Saltus defines HNWs as those with investible assets of at least £250,000. Among respondents, one in seven said the new VAT charge on private school fees was a direct reason to consider leaving the country. Nearly half of those who voted Labour at the last election said they regretted doing so, citing the school fee policy.
The survey also revealed that one in five wealthy parents have already moved their children from private schools. Of those who have not, 71 per cent said they had either made, or were prepared to make, financial sacrifices to cover the additional costs. Some have remortgaged, taken out loans, reduced pension contributions, or even moved house to free up funds.
Mike Stimpson, partner at Saltus, said:
“High net worth individuals are the wealth creators, investors and employers who drive economic growth. If their confidence is undermined by continual uncertainty, that has consequences for everyone.”
Confidence in the UK economy has remained weak following last year’s record tax-raising Budget, with one in eight wealthy respondents now saying Britain is no longer a good place to start a business. Sixteen per cent voiced disapproval over inheritance tax changes, while 14 per cent said the country is no longer an attractive place to raise a family.
Alex Pugh, chartered financial planner at Saltus, noted that families are increasingly planning school transfers at natural transition points, such as the start of secondary school or sixth form.
“These decisions are typically not knee-jerk reactions to the higher fees, but carefully planned moves when changing schools is least disruptive to a child’s education,” he said.
As speculation mounts ahead of November’s Budget, wealth managers warn that further tax changes could accelerate the exodus of Britain’s richest households.
