Latest news with #PatrioticMillionairesUK
Telegraph
08-07-2025
- Business
- Telegraph
UK golden visa would open floodgates to dirty money, Reeves warned
Rachel Reeves would risk 'rolling out the red carpet to kleptocrats, criminals and spies' by launching a golden visa, anti-corruption charities have warned. The Government is considering introducing a special visa to attract wealthy businesspeople to the UK amid concerns that its tax crackdown has driven millionaires out of the country. The scheme would be open to foreigners who invest in areas seen as strategically important to the country such as artificial intelligence and clean energy. However, the investor visa would carry serious 'national security risks' according to charities including the UK Anti-Corruption Coalition and Patriotic Millionaires UK. In a letter to the Chancellor, the charities said: 'We are writing to express our concerns about reports that the UK Government is planning a new investment visa, or 'Golden Visa', scheme. 'Past experience suggests this would be misguided, offer minimal economic benefit and expose the UK to acute national security risks by facilitating foreign influence and the flow of illicit finance.' The UK used to offer residency to investors who put more than £2m into the country. But the government scrapped the golden visa in 2022 as part of a crackdown on 'illicit finance and fraud' following Russia's invasion of Ukraine. In recent years several countries have also cancelled their golden visa programmes. Spain abolished its scheme at the start of 2025 because of concerns that foreign property investors had fuelled a housing crisis. According to the Financial Times, some Labour ministers want to revive the golden visa, but the plan is facing logistical and political challenges. Nicolette Bostock, of law firm Withers, said the UK was in need of a 'robust' immigration option for wealthy investors. 'The UK misses out on the economic uplift of having wealth holders in the UK, using their spending power locally and contributing to society more widely.' She said individuals were already assessed for possible criminality as part of the visa application process. 'The Home Office has previously required investor visa migrants to submit proof of a clear criminal record in every country they have lived in for 12 months or more, going back 10 years. 'In addition, there is a 'sniff test' available to the Home Office to be able to refuse a visa on the basis of adverse character conduct or associations, which allows far-reaching powers for a visa application to be refused even where an applicant has no prior criminal record.' Non-dom crackdown The Government's decision to curb tax breaks for wealthy foreigners has triggered fears of an exodus of millionaires. However the charities argue that claims are 'unfounded'. The Office for Budget Responsibility estimated that 12pc of non-doms would leave in response to the tax changes. Meanwhile, tax advisers say that the end of the non-dom regime has pushed wealthy, globally mobile non-doms to leave for more tax-friendly jurisdictions such as Greece and Italy. Under the new 'foreign income and gains (FIG) regime', which replaced the non-dom system in April 2025, new arrivals can avoid paying tax on foreign income and gains for only their first four years in the UK. Those who have been a UK resident for at least 10 years will face an inheritance tax charge on their worldwide assets. The Treasury was contacted for comment.
Forbes
25-03-2025
- Business
- Forbes
The UK Movement To Tax Extreme Wealth Instead Of Defunding Foreign Aid
Protestors call for an extreme wealth tax outside the UK Treasury. Not many wealthy people plead with their government to tax them more. One of this rare sort is Victoria Lupton, who leads Seenaryo, an arts charity working in the Middle East. Lupton, who recently returned to the UK from Lebanon, feels the weight of the millions of pounds she inherited from her family. 'People with the broadest shoulders need to be paying more in tax,' she stresses. Lupton joined Patriotic Millionaires UK, an offshoot of an American group calling for fairer tax policies, a year ago. But she's become especially energized in the last month, after the surprise announcement that the UK government would be drastically cutting its international development budget. She'd already seen the effects of the aid disruptions caused by the US government; over 80% of USAID projects have now been abruptly eliminated. 'The immediate impact is thousands of people out of work in Jordan,' Lupton reports, in critical areas ranging from refugee education to conflict prevention. She believes the longer-term impact is a whole generation of people in Jordan denied an education because of these cuts, and 'a generation of women who won't be entering the workforce.' Jordan and Lebanon host more refugees per capita than any other country. 'Supporting refugees is not the responsibility only of the immediate neighboring countries,' Lupton argues. So it's been gutting for her to hear that the UK is following the US example. Creating a tax on extreme wealth would be a way for the UK to continue to meet its responsibilities both overseas and at home, Lupton feels. 'The system right now really is rigged to serve the interests of the ultra-wealthy. Work is heavily taxed, and wealth just isn't.' Momentum around this proposal is building. In February, just four months after the UK's prime minister told the UN General Assembly that the country would be 'restoring our commitment to international development', he announced that the UK would actually be cutting its development budget, in order to prop up military spending. Defense spending is already 3.5 times more than development spending, which currently sits at 0.5% of gross national income (GNI). The proposed cut would reduce it further to 0.3%. This would not be sufficient to increase the defense budget as much as the UK government would like. Already it has announced cuts to disability funds as well. Some observers believe the initial raiding of the aid cupboard was an attempt to curry favor with the Trump administration, following its even more extreme demolition of aid. 'It is no surprise that aid cuts were announced just days before Starmer met with Trump,' comments Jerry Moriarty, the senior communications officer for the member of Parliament Chris Law. 'This was done as a political stunt,' believes Nick Dearden, director of the campaign organization Global Justice Now. Unlike in the US, at least the UK aid shrinkage won't start right away. The cuts are due to go into effect by 2027, leaving some time to prepare. The government has already stated that Gaza, Sudan and Ukraine will be priorities, but these programs alone would more than swallow up the future aid budget. Judging from a previous (smaller) UK aid cut in 2021, programs benefitting women and girls could be particularly hard hit. Another trend is that much UK aid going forward will be administered by British International Investment (BII), the agency making private-sector investments in low- and middle-income countries. However, there are concerns about so much of the UK's development funding moving from grants to loans, at a time when African countries already spend more on interest from debt than on health and education. And Dearden believes that it's hypocritical for the UK, whose own healthcare system is largely public, to disburse development loans to less affluent countries for private-sector healthcare. The UK has been disregarding its own aid rules for years. It's legally obligated to spend at least 0.7% of GNI on aid, but Parliament suspended this in 2021. UK aid has already been whittled away in part because a large portion has been diverted to attending to asylum seekers who have arrived in the UK. In other words, supposedly overseas aid is being spent at home. In 2023, 28% of the UK's aid budget went to such domestic spending. This is a large amount of money indeed, despite reports of squalid conditions for the people seeking safety in the UK. In 2024, this growth industry catapulted Graham King, who operates accommodation and transportation for asylum seekers, into the Sunday Times Rich List for the first time. Dearden argues that UK spending on refugee costs at home reveals deep flaws in its handling of migration. With asylum seekers stuck in limbo for years, unable to work, 'you are basically spending a lot of money on the fact that your system is broken.' He believes there would be more impetus to reform that system if it came out of a funding pot that politicians generally cared about more than aid. Mikaela Gavas, the managing director of the research organization CGD Europe, says there are serious problems with how overseas development assistance (ODA) is counted, and the UK has been flouting norms. The OECD's Development Assistance Committee (DAC) has specified that for refugee costs within donor countries, 'it's only the first year cost that really can be counted. But the UK chose to ignore that threshold and has continued to count all of these costs as part of their ODA,' Gavas explains. 'The DAC itself has no power or say in what countries should do; it's not a policing type of body. So the UK can do pretty much what it likes and it has inflated those costs dramatically.' CGD has estimated that the country's actual overseas aid spending will reach just 0.1% of GNI, in light of the cuts. The UK isn't alone in this creative accounting. 'In-donor refugee costs,' in aid jargon, reached an all-time high following Russia's full-scale invasion of Ukraine. Nor is the UK alone in following the US' lead on slashing development funds. 'The government of the Netherlands also decided that they're going to stop funding any projects that do women's participation, women's rights, gender equality, and climate initiatives,' explains Daniela Vancic, Europe policy and advocacy lead for the nonprofit Democracy International. 'I believe this is really a direct result of the US aid freeze.' She worries about the message this sends where democracy promotion programs have been supported by foreign aid. 'It's sending a green light to authoritarians to say, 'Yeah, you can step back. You can backtrack from democracy and stop supporting also any civil society organization.'' Europe has already seen plenty of democratic backsliding itself, notably in Hungary. Still, Trump following in the footsteps of Orbán, whom he admires, has been 'sending a shockwave to us in Europe,' Vancic says. UK aid supporters have proposed a raft of other ways to fund a fatter defense budget without cutting into essential services, including a technology tax, use of seized Russian assets that have been frozen, an oil and gas windfall tax, higher tax on private jets, and a specific levy for defense. Going further, campaigners and researchers have suggested tackling tax evasion and other structures that entrench global inequality. 'A lot of the reasons why low-income countries remain low-income is because corporations and individuals are able to shift profits across borders,' Lupton says. But the messaging has coalesced around one revenue source in particular: a tax on extreme wealth. It's a simple message, which Dearden believes could be palatable for the British public: 'We should be taxing the richest, not taking money from the poorest, if you're going to do this.' This would be a tax of 2% on wealth above £10 million. It's been estimated that it would apply to just 0.04% of the British population, and would collect £24 billion a year. This would dwarf UK spending on international development. Just one of the supporters of a wealth tax is actor Brian Cox, best known for playing embodiment of corporate greed Logan Roy on Succession. Another member of the 0.04%, who would be proud to pay a wealth tax, is Lupton. A 2% wealth tax certainly wouldn't pinch her. 'People in our position simply wouldn't feel a material impact on our lives,' she says. There's plenty of anti-aid sentiment in the UK at the moment, including from people who scoff that anyone can voluntarily pay extra tax, without a policy change. But collective tax reform isn't the same as individual philanthropy, Lupton points out. Already, most of the members of Patriotic Millionaires UK she knows are engaged in philanthropic giving. With tax, 'the whole point is it's mandatory and any contribution that a handful of individual people would make to HMRC [His Majesty's Revenue and Customs] really wouldn't be consequential.' Part of why politicians in wealthy countries are currently treating aid as an easy target is because so many of their constituents are struggling, and feel that sending money to other countries is unfair. 'We're obviously in a moment where because of the level of inequality in our countries, the most vulnerable people at home are also struggling enormously,' Lupton says. So 'it's not the poorest and most vulnerable people in the UK and the US who should be shouldering the responsibility of international aid budgets. That's exactly why we're calling for attacks on wealth.' As others have noted, cutting foreign aid won't improve the situations of people in donor countries. Aid savings will be spent instead on tax cuts (in the US) and weapons (in the UK). A major sticking point with wealth tax proposals is the fear that it would drive rich people away in search of lower tax regimes. There is indeed evidence of this from previous experiences. In Colombia and Sweden, wealthy people hid or lied about their riches after wealth taxes were imposed. Valuing assets can be challenging in general, although narrowing the number of people covered by a wealth tax would help with the administration. Ease of movement for ultra-rich Europeans has helped them to move themselves and their money elsewhere. Thus, wealth taxes have generally collected less than was hoped. So it's probable that a UK tax on extreme wealth would also gather in less than the most optimistic estimates, though it could still be a considerable amount. On the other hand, because wealth held by the richest tends to increase over time, wealth taxes also bite them less than opponents claim. Wealth tax advocates are also hoping that new versions of this tax would build on lessons learned from previous experiments. It's possible that increased tax transparency (although it's still very flawed) could make wealth taxes more feasible now, while increased inequality could make them more popular. And there are ways to make it less appealing for the uber-wealthy to simply trot to another country, such as extending wealth taxes to those who leave, for a certain period. Careful design and enforcement of any UK wealth tax would be critical to success. For her part, Lupton says, 'I'm not going anywhere.' And she doesn't believe that many Brits would ditch their country because of a 2% tax on £10 million. 'The millionaires that I know have built their lives and their communities in the UK. Their worlds are here in the UK. Their children are educated here. Their families live here.' Similarly, Dearden believes that there are strong incentives for most entrepreneurs to remain in the UK, given that 'an awful lot of the industries here get state support. They enjoy a stable regulatory environment, a reasonably well-educated population with good healthcare.' Cooperation among countries would help. If many nations agreed to a common minimum wealth tax, there would be less reason for an ultra-millionaire to move to a lower tax jurisdiction. However, it's proven challenging to achieve consensus. Improving enforcement of tax policies in Africa would also bring in resources that could help plug the gap in foreign aid. Currently, much wealth and income held in Africa goes untaxed. The International Centre for Tax and Development has calculated that improved enforcement could raise up to US$5.5 million in Uganda, for example. Assessing and collecting the fair amount of property taxes would be especially effective. So far, in response to the UK aid cuts, Ethiopia has proposed a new income tax to pay for projects previously funded by USAID, including medicines, vaccines, and literacy programs. There have also been suggestions of domestic taxes on tobacco and alcohol. However, an earlier series of sales tax hikes in Kenya sparked unrest. Unlike a wealth tax, consumption tax hits the poorest hardest. Back in the UK, it gives Lupton hope that in a time where many people are despairing, solutions like an extreme wealth tax are being proposed. 'People are willing to rebalance, and understand that the system isn't currently fair,' she believes. 'This isn't an impossible mountain to climb.'
Telegraph
12-03-2025
- Business
- Telegraph
‘Inheriting £10m was a curse': why young heirs are giving away their fortune
When Paolo Fresia inherited tens of millions of pounds following his mother's death, it was 'a blessing and a curse'. At first, he simply acted as though it wasn't happening. Then, at age 22, 'my focus was to run away and pretend that it didn't exist', he says. 'Unfortunately for some other of my relatives who received money,' – hundreds of millions from the family vermouth company fortune were split between them – the windfall 'ended up corrupting their lifestyle and also their mental health, so it wasn't good for them, and that money was wasted.' The young and very, very wealthy, it transpired, 'are not the people probably best suited to steward it'. It is for this reason that 36-year-old Fresia, who lives in London, has joined Patriotic Millionaires UK – a group designed to help the rich give away their money. With millennials set to inherit huge fortunes – and current millionaires giving away less than ever – younger adults are seeking new ways to part with their cash. 'You don't want to come out as wealthy to your friends' Finding out you're set to inherit a windfall isn't the magical Hallmark moment many might expect, Fresia says. As well as dealing with the trauma of the death that has inevitably accompanied it, often the young 'don't want to come out as wealthy to their friends'. And so he ignored his fortune, working for Medicins Sans Frontieres in sustainability, before realising some of the company's investments didn't align with his beliefs. Things came to a head when Fresia reached his mid-20s. 'I really said, 'Okay, I can't run away from it any more. I've got to do something about it'.' Fresia began looking into ways his money might make a difference. He had been working for a family firm in Hong Kong when he began enquiring about where his money might be put to good use. He was pointed in the direction of networks like Patriotic Millionaires, which guide people who would otherwise have no idea how to spend their large sums. 'Life became a lot easier because there are incredible advisers that you can pay to give you advice. But in the end, the buck stops with you,' he adds. 'If you don't do the personal work of really acknowledging your privilege, understanding your responsibility to redistribute away resources and your power – and so sometimes acknowledging the fact that you're not the best person to make those investment or philanthropic decisions – then, of course, the whole thing doesn't work.' Antonia Mitchell, director of Aurelia Philanthropy, says that around 40pc of her clients are aged under 40, typically seeking her help to spend away family money, rather than their own. Some $90 trillion (£70 trillion) will be transferred to American millennials, with 94pc of the wealthiest fifth of households in the UK set to leave a bequest, according to figures from the Resolution Foundation. Yet, unlike their parents, younger generations are most keen to spend on what Mitchell calls 'destitution issues', such as refugees, gender or race matters, those affecting the LGBTQ+ community, 'and medical research in which, interestingly, they include mental health – which is in stark contrast to their parents who tend to avoid it', Mitchell adds. 'A lot of these issues tend to be tricky to navigate between their generation and the older generation who have radically different views,' she explains. 'There's no doubt that the increase in discussion around issues like gender politics have shaped why they see it through that lens.' Fresia says that among his age group and below, some wealthy people 'do feel really guilty, especially when the history of their wealth is in industries that are a little bit more controversial, like weapons or oil and gas – and it's understandable, of course. 'But it's about switching that to being more action-oriented, and saying, 'The money was earned in this way. How can you have a clear reparations plan to make good all the negative impacts that money might have made while being made, and then moving on to redistributing it?' I operate under that mindset'. 'It's the same inheritance issues everyone faces – but on steroids' In typical millennial style, discussions over how to give away large sums often happen via dedicated retreats where attendees, clad in 'Tax the rich' T-shirts, visit workshops to confront their 'wealth shadows' – the physical embodiment of the anguish their fortune has wrought. Online networks also play a big part, as does social media. Many groups have formed too (namely in America), including Donor Revolt and Resource Generation – all dedicated to helping the young syphon off inherited cash. The methods people choose can be somewhat unorthodox. Last year, Marlene Engelhorn, a 32-year-old from Vienna, announced that she would be distributing the £21.5m she had received from her grandmother's pharmaceutical empire to 50 recipients, who would be selected based on the suggestions from the 10,000 letters she posted out to fellow Austrians, which asked who they thought would be most deserving. Mitchell says that 'giving is easy, giving well is hard, and as they start realising that giving well is difficult, that's when they call me'. Her client with the smallest fortune is giving away £60,000 – the largest, £1.5m. 'I do see a lot of tension,' she adds of the family dynamics that ensue – either because parents see their child's giving intentions as the rejection of a gift, relatives disagree over where money should go ('I was dealing with somebody who was actually really disappointed in their child… they cared about homelessness, but the father was uninterested'), or there are arguments over what they're entitled to in the first place. 'I always say it's the same challenges everybody else faces, but on steroids.' Mitchell has one client who grew up on the edges of poverty, 'did really well for himself, and his children have grown up in private education… How does he then teach his children the values that have been central to his success?' she says. Financial and social responsibility can be difficult things for rich kids to learn: 'Philanthropy is all about your moral compass.' How, or perhaps what, to tell children is a perennial conundrum among many wealthy families. Mitchell's past clients have included the offspring of an entrepreneur who 'hadn't realised how wealthy the family was, and then it all came out in the media. And for them that was quite traumatic and quite stressful… they'd read so many articles about rich people doing bad things, and they didn't want to be part of that.' With some of the youngest inheritors now having children of their own, these quandaries are becoming more acute. The question is 'really on my mind these days, actually', Fresia says of his four and six-year-old. 'I really hope that they will be angry at me when they're teenagers for not having given enough money away, as opposed to not having given enough money to them. But I'll see if I succeed in making them angry in that direction.' He admits, however, that, 'I'm not a super frugal saint.' His children go to private school, the family goes on nice holidays, and while he is a 'huge admirer' of people like Engelhorn, he says he is 'not as brave as them'. His risk tolerance has fallen since his brood expanded (currently 80pc of his wealth is invested in good causes). He feels that his own generation, and the one they have borne, will have a very different experience of inheriting wealth. 'A lot of what was happening in previous generations is that because of this paradigm of accumulating and preserving, the younger generation was shielded from knowing how much they were going to inherit and what the money was for,' he explains. 'Whereas we are going to be very clear with our young children about the fact that this wealth, especially because it was inherited, is not for the purpose of living an overly luxurious life,' he says. Rather, Fresia wants his children to learn that the money should be viewed 'for the purposes of being a good steward of it and redistributing it.' Beyond the money, 'clarity, I think, is the biggest gift that I can give them, because I did not have that. I really didn't'.
