Will Higher Income Earners Flee Their UK Homes?

As you would expect, the top income earners in this country reside in some of the most desirable homes within the UK. From country retreats to city apartments, they enjoy the very best in life. But will they soon need to leave their homes?

In these pre election times, the future is always uncertain. And with the talk of increased tax rises, there is much discussion on how it will impact on the economy, homeowners and mobility of people. Will multi-nationals with headquarters in the UK relocate to destinations with lower taxes? If this happens, how many jobs could this affect? And will this be the final push to those on higher incomes to finally move overseas?

The Directors Association have already predicted the latest changes will start to see some of the top 300,000 high income earners leave the UK. Both unpopular moves starting virtually immediately, the 50% tax rate will be removed for those earning over £150,000 and for those over £100,000, they will no longer receive any tax allowance. The upside for the government is an extra £3.6 billion pounds over the next year, however the long term downside could be a reduction in skilled senior management living in the UK.

A further blow to high income earners is next year’s planned pension tax changes. The plans will currently result in high earners over £150,000 receiving less tax relief on their own pension contribution. The Institute for Fiscal Studies have quoted these plans as “"complex, unfair and inefficient", stating that many will purposely reduce their salary to avoid hitting the £150,000 income level and increase their pension contributions.

Alas, whatever happens it is unlikely the man in the street will be picking country retreats or top city apartments at knock down prices. And many who do decide to work overseas are likely to retain their UK residents for when tax laws change back.