Osborne’s pensions raid would drive pension funds overseas

23 Nov

With the Chancellor, George Osborne, plotting a new tax raid on the pension pots of higher earners, an increasing number of better-off voters will consider moving their retirement funds out of the UK.

Mr Osborne is considering a significant cut in the maximum annual pension contribution that is exempt from tax from £50,000 to £40,000  – or perhaps even lower.

Such a move could see up to four million people hit with an extra tax bill and so it would, inevitably, prompt those people to look at transferring their pension pots into more tax-efficient jurisdictions.

Squeezing more cash out of higher earning Britons will give them another incentive to move their funds out of the UK.  An exodus of these assets would be bad for Britain as it would weaken other sources of government revenue.

It should come as little surprise if the higher earners did, indeed, move their pension pots offshore as a direct result of such a raid by the Treasury as they already face a range of taxes including stamp duties on shares and properties, capital gains, inheritance taxes and high income tax rates.

In short, should Mr Osborne forge ahead with this proposal, it will drive capital overseas, which would have a negative impact on the economic growth.

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