As Dubai Becomes the New Chelsea, Brace for Exit Taxes

Extraordinary times bring extraordinary taxes. The US Civil War prompted the country’s first income tax; the Cold War led to its first exit tax. Now the UK has come under pressure to impose its own levy on wealthy departees, as the Labour government seeks to plug a £22 billion ($29 billion) budget hole. Several other European countries have exit taxes, including France and Norway, but this would be a big break with the last Labour administration’s “intensely relaxed” attitude to the rich.

Exit taxes are rarely big revenue raisers, especially as they often take the form of a levy on future capital gains if and when assets are sold. Between 2012 and 2017, France’s since-reformed version only directly raised an estimated €140 million ($153 million). They aren’t very efficient, either: Norway is currently adjusting its regime amid complex loopholes and a backlash from entrepreneurs, including one who wrote a catchy song. Hence the UK government doesn’t currently plan to introduce one, the Financial Times reported Thursday citing unidentified government insiders.