WEBVTT - Could This Tax Overhaul Spark a UK Wealth Exodus?

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News. Welcome to in the City.

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<v Speaker 1>Each week we unpack a story that's crucial to the

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<v Speaker 1>world's financial capitals. I'm Allegri Stratton.

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<v Speaker 2>And I'm Francis Laqua.

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<v Speaker 1>This week we're going to dig into the impact of

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<v Speaker 1>the UK's decision to end the non dom residence status.

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<v Speaker 1>The goal was to close a tax loophole most used

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<v Speaker 1>by wealthy foreigners, but could the government's plan to generate

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<v Speaker 1>billions more in taxes annually actually backfire. Welcome to the City.

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<v Speaker 3>Of London, The City of the City of London.

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<v Speaker 2>Release mind the gap between.

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<v Speaker 3>The financial heart of the country, the city the city.

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<v Speaker 3>Welcome to in the City, then clear of the doors.

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<v Speaker 1>Pe so from. There's a new study out by the

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<v Speaker 1>Center for Economics and Business Research. Its main finding is

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<v Speaker 1>that the UK's tax overhaul for wealthy foreigners could cost

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<v Speaker 1>the economy more than it brings in. Can you believe it?

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<v Speaker 2>Well, we've already heard of a lot of people actually

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<v Speaker 2>leaving because of the new rules, and the think tanks

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<v Speaker 2>argument is that if just one in four of those

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<v Speaker 2>affected choosers to leave the country, then the reforms to

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<v Speaker 2>the tax policy would actually flip from a net gain

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<v Speaker 2>for the Treasury to actually a.

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<v Speaker 1>Cost yep and according to the Office for Budget Responsibility,

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<v Speaker 1>Britain's official fiscal watchdog, around twelve percent of the UK's

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<v Speaker 1>non doms would leave in response to the government's changes.

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<v Speaker 1>So obviously that's not yet up at that one in

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<v Speaker 1>four ratio, but nonetheless it's quite a large number, isn't it.

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<v Speaker 2>Yeah, it's large. Now the Treasury is pushing back. It

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<v Speaker 2>says it doesn't not recognize the figures in this report.

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<v Speaker 2>But still report brings up some points that a lot

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<v Speaker 2>of people in the city have been discussing. So in

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<v Speaker 2>this episode we're going to talk about whether this is

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<v Speaker 2>a clever tax strategy that levels of playing field, or

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<v Speaker 2>isn't actually a risky move that could push away the

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<v Speaker 2>very people who fuel parts of the UK economy. So

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<v Speaker 2>to discuss all of this, we're joined by Nimeshah, chief

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<v Speaker 2>executive officer of Blick Rothenberg. Now, Nimesh works closely with

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<v Speaker 2>entrepreneurs across a wide range of industries. He advises them

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<v Speaker 2>on all aspects of their personal and corporate tax affairs,

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<v Speaker 2>whether they're just starting out, scaling up or planning an exit.

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<v Speaker 1>So thanks for joining us, NIMESH. Can you just describe

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<v Speaker 1>from your vantage point what you are seeing right now

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<v Speaker 1>in wealthy individuals deciding how to handle this new regime.

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<v Speaker 3>The climate on the non domin reforms has changed completely

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<v Speaker 3>over the last twelve months since the original Tory announcement.

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<v Speaker 3>There was an initial backlash from I know with individuals

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<v Speaker 3>about leaving the UK as the original announcements were handled

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<v Speaker 3>incredibly badly in terms of the shock announcement and the

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<v Speaker 3>lack of consultation, and then they worry that a future

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<v Speaker 3>labor government might make those rules even more difficult. Since then,

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<v Speaker 3>we've seen maybe a tempered down of people actually wanting

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<v Speaker 3>to leave the UK. That knee reaction has slowed down slightly,

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<v Speaker 3>but there is still a direction of wealthy individuals who

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<v Speaker 3>are at least planning on leaving the UK over the

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<v Speaker 3>medium term. It may not have been as extreme as

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<v Speaker 3>people leaving straight away on the fifth of April of

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<v Speaker 3>this taxi here, but certainly people are making plans on schooling, housing,

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<v Speaker 3>accommodation work, setting up their businesses abroad so that they

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<v Speaker 3>can exit the UK over a longer period of time.

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<v Speaker 3>So I think maybe some of the stories that we're

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<v Speaker 3>seeing in the press are slightly blown out proportion around

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<v Speaker 3>very high profile individuals that are making steps to leave

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<v Speaker 3>and maybe can feasibly leave more easier because they already

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<v Speaker 3>have established infrastructure abroad. I think the majority of high

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<v Speaker 3>net worth individual population is taking a much more measured

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<v Speaker 3>approach over the medium term to make plans to leave

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<v Speaker 3>the UK, so we'll see this gradual effect over a

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<v Speaker 3>period of time.

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<v Speaker 1>The story we're looking at this week is this idea

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<v Speaker 1>that as soon as it gets to be one in

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<v Speaker 1>four of the UK's non doms leaving the UK, then

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<v Speaker 1>that is when the policy goes from bringing in money

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<v Speaker 1>to losing money. Do you think that's a threshold that

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<v Speaker 1>will ever be reached.

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<v Speaker 3>I suppose It's difficult to say where the one in

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<v Speaker 3>four is actually come from. I imagine there is some

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<v Speaker 3>sort of science and maths behind those statistics. At the moment,

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<v Speaker 3>the government is banking on a number of non doms

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<v Speaker 3>still staying in the UK and actually using the temporary

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<v Speaker 3>Repatriation facility, which is a twelve or fifteen percent tax

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<v Speaker 3>charge to bring historic moneies into the UK. A lot

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<v Speaker 3>of the revenues actually coming from that, and if you

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<v Speaker 3>look at the Ober projections, it was about thirty billion

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<v Speaker 3>that the government were planning to raise over the lifetime

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<v Speaker 3>of this parliament. I don't think there will be necessarily

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<v Speaker 3>a tipping point in this parliament where we see one

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<v Speaker 3>in four or if it's one in five, whatever the

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<v Speaker 3>number may be, may lead where it starts costing the

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<v Speaker 3>government tax revenue, because I think the effects of this

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<v Speaker 3>is more gradual, giving the gradual pattern of people leaving,

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<v Speaker 3>and also that hit the Treasury expected to get from

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<v Speaker 3>the temporary repatriation facility as well.

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<v Speaker 2>In the METS what kind of non doms are leaving,

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<v Speaker 2>So I think overall you have seventy four thousand non

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<v Speaker 2>doms in the UK. Now, under the previous system, non

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<v Speaker 2>dams can basically avoid UK taxes on their overseas earnings,

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<v Speaker 2>but would still pay taxes on domestic income, spending and

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<v Speaker 2>any funds brought to the UK. I mean the concern

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<v Speaker 2>if you're a wealthy businessman and we know there are

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<v Speaker 2>a lot of them that chose the UK to be

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<v Speaker 2>their home, but they have billions of dollars of billions

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<v Speaker 2>of sterliings of investments elsewhere, I mean, it doesn't make

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<v Speaker 2>it makes zero sense for them to stay in the

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<v Speaker 2>UK if they're going to be our attacked on those assets.

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<v Speaker 3>Yeah, tax was a driver, a incentive for wealthy foreigners

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<v Speaker 3>to come into the UK, but it wasn't the only consideration.

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<v Speaker 3>In my experience of working with non arms over the

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<v Speaker 3>last twenty years, said to someone only today that London

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<v Speaker 3>is the center of the world. Really has the perfect

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<v Speaker 3>time zone. It has a solid sort of predictable climate

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<v Speaker 3>as well. Maybe not the sunshine that we'd expect all

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<v Speaker 3>the time, but the schooling is great, a long history,

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<v Speaker 3>The schooling's great, It's got a history, the tradition. London

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<v Speaker 3>has a lot of attraction as far as bars, restaurants, theaters,

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<v Speaker 3>activities have to go. So as a home, London still

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<v Speaker 3>has a lot of pull, not at least also the

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<v Speaker 3>safety considerations and the rule of law as well. I'd

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<v Speaker 3>say tax was maybe the carrot that hooked people in

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<v Speaker 3>to considering the UK in the first place, but there

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<v Speaker 3>are lots of other reasons why people would stay here

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<v Speaker 3>as well.

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<v Speaker 2>But again, if I'm a billionaire and I have you know,

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<v Speaker 2>big businesses in India, if have big businesses in the

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<v Speaker 2>US and now have to pay taxes on those business

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<v Speaker 2>so frankly have nothing to do with the UK. Is

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<v Speaker 2>there any other country that's as punitive for non arms

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<v Speaker 2>as this new system is.

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<v Speaker 3>Well, just to demystifyze some of that as well, if

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<v Speaker 3>you do have a business with substance operating a different country,

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<v Speaker 3>it's not necessarily immediate the profits of that business are

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<v Speaker 3>going to be taxed on you. Now in the New World,

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<v Speaker 3>there are and have been lots of statutory exemptions reliefs

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<v Speaker 3>within the UK tax law which does exempt overseas businesses

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<v Speaker 3>from being taxed in the UK provided they have operations

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<v Speaker 3>and substance in those areas. So in some cases, yes,

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<v Speaker 3>non doms will face additional taxes because of the new

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<v Speaker 3>regime because of the money that they have accumulated outside

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<v Speaker 3>of the UK and a generating income on that. But

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<v Speaker 3>there are other jurisdictions who follow very very similar pattern.

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<v Speaker 3>I mean, our closest sort of neighbor around this is

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<v Speaker 3>the US, where the US actually has more difficult rules

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<v Speaker 3>for overseas corporations that are operating outside of the US

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<v Speaker 3>and taxes then being levied on those profits for US

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<v Speaker 3>resident persons. But the thing that I suppose the UK

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<v Speaker 3>needs to be very mindful of which I think the

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<v Speaker 3>government has maybe underestimated, is a number of jurisdictions are

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<v Speaker 3>popped up which are offering very very attractive tax incentives

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<v Speaker 3>and holidays, and maybe the infrastructure isn't there, or maybe

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<v Speaker 3>the attractiveness of those locations isn't quite there yet, but

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<v Speaker 3>the tax is definitely turning a lot of heads for

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<v Speaker 3>people to consider those locations, and I think those will

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<v Speaker 3>become even stronger over the next few years as more

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<v Speaker 3>people start to live in those areas and the infrastructure

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<v Speaker 3>starts building up around them.

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<v Speaker 1>Yeah, I mean before we get onto the rivals and

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<v Speaker 1>the sort of morsels that they're offering to attract people

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<v Speaker 1>to leave the UK. In terms of the British regime,

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<v Speaker 1>my understanding was that for a certain age of very

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<v Speaker 1>wealthy individuals, it was the inheritance tax policy in particular

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<v Speaker 1>that was felt to be really something that they couldn't stomach.

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<v Speaker 3>Yeah. I think that from my perspective in speaking to

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<v Speaker 3>my peers in the profession, the inheritance tax was the

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<v Speaker 3>straw that broke the camel's back. I think there is

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<v Speaker 3>a real hatred for inheritantis. I mean it's widely reported

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<v Speaker 3>the inheritance tax is the most hated tax in the UK.

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<v Speaker 3>And for non doms, they've never had to really think

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<v Speaker 3>about inheritance tax. It's something that they would not have

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<v Speaker 3>been subject to under the Old World and through some

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<v Speaker 3>sensible planning that they would have done using offshore trusts.

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<v Speaker 3>They now face the reality of a cliff edge from

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<v Speaker 3>now this April where they are exposed to inheritsonce tax

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<v Speaker 3>forty percent on their worldwide assets. There is some limited grandfathering,

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<v Speaker 3>but it's not as generous as what the original Conservative

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<v Speaker 3>proposals were suggesting. And so that's the area where non

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<v Speaker 3>doms are most concerned. That they've said that actually, I'd

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<v Speaker 3>built up wealth, large amounts of it when i haven't

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<v Speaker 3>had anything to do the UK. I've spent a period

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<v Speaker 3>of time in the UK, and that full wealth now

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<v Speaker 3>is exposed to UK inheritance tax at forty percent. And

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<v Speaker 3>it's that forty percent that is the headline grabber here

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<v Speaker 3>where people feel that is a big number and that's

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<v Speaker 3>not something that they're prepared to stomach and there is

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<v Speaker 3>a real and fairness around being taxed on something that

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<v Speaker 3>had nothing to do with their UK or their time

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<v Speaker 3>in the UK. So that's the I suppose the push

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<v Speaker 3>factor here for lots of non doms. They're saying, well,

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<v Speaker 3>i need to get out of the UK system because

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<v Speaker 3>I'm not going to risk a forty percent hit on

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<v Speaker 3>something that I just firmly believe should never be assessed

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<v Speaker 3>to UK and Erison's tax in the first place.

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<v Speaker 1>The government they were trying to do two things. They

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<v Speaker 1>were trying to do something political, so they were trying

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<v Speaker 1>to signal that, you know, to the Labor Party, to

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<v Speaker 1>the left of the Labor Party, that they were going

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<v Speaker 1>to be more egalitarian and redistribute wealth and all of that.

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<v Speaker 1>They're also trying to make money with a very very

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<v Speaker 1>straightened budget book. So they're the two things they were

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<v Speaker 1>trying to operate for. But equally, I suspect if you

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<v Speaker 1>can't of got them in a room and ask them truthfully,

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<v Speaker 1>you know, do they regret some of it or the

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<v Speaker 1>full extent of the departures we're watching. They might say

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<v Speaker 1>that they're a bit worried because what has become more

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<v Speaker 1>and more clear is that growth is what they need.

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<v Speaker 1>By the next election, they need to show that the

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<v Speaker 1>UK economy is growing and if you lose too many

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<v Speaker 1>wealthy people, absolutely take your point that it is not

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<v Speaker 1>yet at that kind of tipping point number that the

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<v Speaker 1>report suggests, but if you lose too many people, that

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<v Speaker 1>is trickier. Yeah.

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<v Speaker 3>I think it would be remiss of the government and

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<v Speaker 3>the Rachel Reason's team to acknowledge that this isn't concerning

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<v Speaker 3>the stories and the plans that certainly individuals are making

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<v Speaker 3>over the next few years, and how that then impacts

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<v Speaker 3>the growth of gender. I think what we've also not

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<v Speaker 3>talked about is the number of foreigners wealthy individuals are

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<v Speaker 3>now not coming to the UK as well, which is

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<v Speaker 3>very difficult for anyone really to measure and capture. If

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<v Speaker 3>I suppose I've had my time, I suppose and go back.

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<v Speaker 3>I think the government did a poor job at executing this,

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<v Speaker 3>and that goes right back from the Conservative government when

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<v Speaker 3>they announced the proposals as a phata con plea. There's

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<v Speaker 3>no consultation period. They didn't engage with the professional community

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<v Speaker 3>like myself on the design of these proposals. They were done,

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<v Speaker 3>and the lip service I suppose the profession received afterwards

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<v Speaker 3>also left a sour taste. And then I think Labour

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<v Speaker 3>coming out and saying we're going to make these wolves

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<v Speaker 3>worse again, that sent a lot of uncertainty into the

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<v Speaker 3>international community around this. I think there is still an

0:12:33.520 --> 0:12:37.439
<v Speaker 3>opportunity for the government, which not any government will probably

0:12:37.440 --> 0:12:39.000
<v Speaker 3>ever do, but to hold their hands up and say

0:12:39.040 --> 0:12:41.439
<v Speaker 3>we got this wrong, but we've got this wrong as well,

0:12:41.480 --> 0:12:43.800
<v Speaker 3>not only on non doms. We've got it wrong on

0:12:43.880 --> 0:12:47.440
<v Speaker 3>inheritance taxes, the farmers, the family businesses, the pension funds.

0:12:47.800 --> 0:12:51.280
<v Speaker 3>There's a number of areas of change that the government

0:12:51.320 --> 0:12:54.599
<v Speaker 3>have made on taxes as a package which has signposted

0:12:54.640 --> 0:12:57.160
<v Speaker 3>and pushed non doms out of the UK. I think

0:12:57.200 --> 0:12:59.200
<v Speaker 3>they could come back to the table and engage with

0:12:59.360 --> 0:13:02.400
<v Speaker 3>certainly the non community and say we think we got

0:13:02.400 --> 0:13:05.320
<v Speaker 3>this wrong. We can change this, and we can come

0:13:05.400 --> 0:13:08.840
<v Speaker 3>up with a new system or an enhancement of currently

0:13:08.880 --> 0:13:11.480
<v Speaker 3>of what we have, which could be a longer period

0:13:11.559 --> 0:13:13.520
<v Speaker 3>than the four years that we've got right now to

0:13:13.600 --> 0:13:16.080
<v Speaker 3>ten years to mirror kind of what some of the

0:13:16.080 --> 0:13:19.120
<v Speaker 3>competitor jurisdictions are doing. And also we want to be

0:13:19.160 --> 0:13:21.800
<v Speaker 3>able to find a way in which we can cushion

0:13:21.840 --> 0:13:25.240
<v Speaker 3>some of the inheritance tax friction that we're seeing, which

0:13:25.320 --> 0:13:28.280
<v Speaker 3>coupled with a fee that's been talked about a lot

0:13:28.520 --> 0:13:32.240
<v Speaker 3>and some lobbying groups have proposed a tiered tax system

0:13:32.360 --> 0:13:34.800
<v Speaker 3>where you would pay an annual fee based on the

0:13:34.840 --> 0:13:36.760
<v Speaker 3>level of wealth that you have, which would protect you

0:13:36.800 --> 0:13:40.520
<v Speaker 3>then from not only your income engagement, more importantly the

0:13:40.559 --> 0:13:43.319
<v Speaker 3>inheritance tax regime, and also then balance the books by

0:13:43.360 --> 0:13:46.880
<v Speaker 3>saying to the public that actually we need wealthy investment

0:13:46.880 --> 0:13:48.800
<v Speaker 3>into the UK. The UK is an island and has

0:13:48.840 --> 0:13:52.520
<v Speaker 3>been built on immigration investment here for a long time.

0:13:52.760 --> 0:13:55.000
<v Speaker 3>Here's a means to be able to get more revenue

0:13:55.000 --> 0:13:58.280
<v Speaker 3>from this population, balance the books, more money going into

0:13:58.320 --> 0:14:01.640
<v Speaker 3>the public services which were desperately but also it supplements

0:14:01.679 --> 0:14:05.240
<v Speaker 3>our growth agenda with more private investment into our businesses

0:14:05.280 --> 0:14:06.120
<v Speaker 3>and infrastructure.

0:14:06.480 --> 0:14:08.319
<v Speaker 2>No match. How many millionaires do you think the UK

0:14:08.440 --> 0:14:10.640
<v Speaker 2>has lasted so far? So there were reports to saying

0:14:10.679 --> 0:14:14.080
<v Speaker 2>that it was about eleven twenty twenty four. And if

0:14:14.080 --> 0:14:18.120
<v Speaker 2>there is a change in tax regime inheritance taxation, do

0:14:18.200 --> 0:14:20.840
<v Speaker 2>they come back? I mean it's very difficult to kind

0:14:20.840 --> 0:14:22.840
<v Speaker 2>of pack up your family and come back to the UK.

0:14:23.040 --> 0:14:26.200
<v Speaker 2>So is there long term damage done no matter what

0:14:26.240 --> 0:14:27.720
<v Speaker 2>happens in the next couple of quarters.

0:14:28.000 --> 0:14:29.680
<v Speaker 3>Yeah, I think it's important to say there is probably

0:14:29.680 --> 0:14:32.000
<v Speaker 3>a bit of sensitivity in that eleven thousand number that

0:14:32.120 --> 0:14:34.920
<v Speaker 3>is based on a projection, an estimate. It's probably the

0:14:34.960 --> 0:14:38.400
<v Speaker 3>only bit of research that probably exists out there is

0:14:38.400 --> 0:14:42.280
<v Speaker 3>the reality eleven thousand. I don't think anyone's captured that

0:14:42.400 --> 0:14:45.560
<v Speaker 3>data yet. Hopefully we'll see some official Treasury data come

0:14:45.560 --> 0:14:48.000
<v Speaker 3>out over the next few years. But what I am

0:14:48.120 --> 0:14:51.360
<v Speaker 3>seeing is two schools have thought here really from non doms,

0:14:51.360 --> 0:14:53.840
<v Speaker 3>which is one those that are prepared to ride it

0:14:53.880 --> 0:14:56.560
<v Speaker 3>out for the next four or five years during the

0:14:56.600 --> 0:14:59.120
<v Speaker 3>lifetime of this government because they feel that this government

0:14:59.120 --> 0:15:02.800
<v Speaker 3>won't last a second term, and say, actually, I'm prepared

0:15:02.840 --> 0:15:05.480
<v Speaker 3>to take the tax exposure in that period of time.

0:15:05.520 --> 0:15:07.760
<v Speaker 3>Maybe they're in a fortunate position where they're not quite

0:15:07.840 --> 0:15:10.440
<v Speaker 3>at the ten year juncture, so they're not fully exposed

0:15:10.480 --> 0:15:12.680
<v Speaker 3>to inheritance tax yere, so they've got a bit more

0:15:12.680 --> 0:15:15.720
<v Speaker 3>time in the hands. The other camp, we're saying, actually,

0:15:16.040 --> 0:15:18.360
<v Speaker 3>I'm gone, I need to get out of the system

0:15:18.400 --> 0:15:21.000
<v Speaker 3>before inheritance tax does come to bite me. But I'm

0:15:21.080 --> 0:15:24.000
<v Speaker 3>keeping a very watching eye on what will happen around

0:15:24.080 --> 0:15:27.520
<v Speaker 3>potential changes if we do have, say, a reform government.

0:15:27.560 --> 0:15:30.680
<v Speaker 1>I'm going to say it might not necessarily get better

0:15:31.160 --> 0:15:32.160
<v Speaker 1>for them.

0:15:32.320 --> 0:15:35.040
<v Speaker 3>Well, it may not because of a slightly different political

0:15:35.040 --> 0:15:37.960
<v Speaker 3>agenda if it is a reform government in the future,

0:15:38.320 --> 0:15:42.560
<v Speaker 3>but depending on where the direction goes politically. And I

0:15:42.600 --> 0:15:45.400
<v Speaker 3>think that's really important that some are saying, well, this

0:15:45.440 --> 0:15:47.800
<v Speaker 3>is a short term move for me out of the UK,

0:15:47.800 --> 0:15:50.320
<v Speaker 3>because I actually want to go and live in London.

0:15:50.320 --> 0:15:51.800
<v Speaker 3>I want to live in the UK for all the

0:15:51.840 --> 0:15:55.080
<v Speaker 3>reasons that we've talked about, and so in the world

0:15:55.120 --> 0:15:57.560
<v Speaker 3>where it is a bit more feasible to be more

0:15:57.560 --> 0:16:01.040
<v Speaker 3>transient and be more mobile and work abroad. It's inconvenient

0:16:01.120 --> 0:16:04.160
<v Speaker 3>where you've got young families and maybe certain business operations here.

0:16:04.280 --> 0:16:05.960
<v Speaker 3>But I think people are prepared to take a five

0:16:06.040 --> 0:16:08.680
<v Speaker 3>year view and then in the hope that in five

0:16:08.760 --> 0:16:11.440
<v Speaker 3>years time it will change. But I suppose the warning

0:16:11.480 --> 0:16:15.160
<v Speaker 3>shot there is that's an optimistic view. It's very difficult

0:16:15.200 --> 0:16:18.520
<v Speaker 3>for any government, new or old to then say, well,

0:16:18.560 --> 0:16:20.920
<v Speaker 3>there's a tax revenue that's coming in. How do I

0:16:20.960 --> 0:16:24.240
<v Speaker 3>square the circle by potentially a giveaway both politically and

0:16:24.320 --> 0:16:28.080
<v Speaker 3>financially in order to make this work. And so the

0:16:28.120 --> 0:16:31.040
<v Speaker 3>government it's like a drug. I suppose when you raise taxes,

0:16:31.240 --> 0:16:33.440
<v Speaker 3>it's very difficult to get off that drug. And I

0:16:33.440 --> 0:16:36.080
<v Speaker 3>think that's the difficulty that we'll find in the future.

0:16:36.120 --> 0:16:38.640
<v Speaker 3>So for some people, as I say, are in holding

0:16:38.640 --> 0:16:41.800
<v Speaker 3>pattern and hopeful that things will improve over the next

0:16:41.800 --> 0:16:42.600
<v Speaker 3>five years.

0:16:43.040 --> 0:16:45.840
<v Speaker 1>I wonder whether for a lot of these countries, including Italy,

0:16:45.840 --> 0:16:47.880
<v Speaker 1>which has got a very beneficial regime for them, but

0:16:47.920 --> 0:16:50.680
<v Speaker 1>even so, you know, they have the same constraints on

0:16:51.120 --> 0:16:55.000
<v Speaker 1>an aging population, needing more money, needing more taxation. Clearly

0:16:55.040 --> 0:16:57.920
<v Speaker 1>they've made a decision that they want to entice the

0:16:57.960 --> 0:17:02.080
<v Speaker 1>billionaires and millionaires rather than you know, tax them at

0:17:02.080 --> 0:17:05.679
<v Speaker 1>the level that we are. But nonetheless, lots of nations

0:17:05.800 --> 0:17:10.200
<v Speaker 1>are facing the same pressures, demographic pressures and fiscal pressures,

0:17:10.560 --> 0:17:13.080
<v Speaker 1>which is why they're starting to look at non doms.

0:17:13.240 --> 0:17:15.600
<v Speaker 1>And I suppose if you're a non doom you're thinking, well, actually,

0:17:15.640 --> 0:17:18.720
<v Speaker 1>my room for maneuver over the next few years is reducing.

0:17:19.400 --> 0:17:22.680
<v Speaker 3>Yeah, places like Italy clearly have made a strategic decision

0:17:23.119 --> 0:17:25.040
<v Speaker 3>that this is where they're going to place their chips

0:17:25.040 --> 0:17:29.480
<v Speaker 3>by creating this very attractive tax and immigration regime to

0:17:29.520 --> 0:17:34.040
<v Speaker 3>go and entice wealthy foreigners into Italy. Now, what I

0:17:34.080 --> 0:17:37.600
<v Speaker 3>suppose I'm encouraged by when I look at governments like

0:17:37.640 --> 0:17:40.800
<v Speaker 3>Italy is that they've made a strategic decision. It doesn't

0:17:40.800 --> 0:17:43.959
<v Speaker 3>feel like there is a strategy with our government at

0:17:43.960 --> 0:17:46.320
<v Speaker 3>the moment around what they actually want to do. It's

0:17:46.359 --> 0:17:50.680
<v Speaker 3>based on lots of reaction and ideology unfortunately at this stage.

0:17:50.680 --> 0:17:53.720
<v Speaker 3>So I'm unclear as someone who's been working in tax

0:17:53.760 --> 0:17:56.679
<v Speaker 3>for the last twenty years as to what this government

0:17:56.720 --> 0:17:59.359
<v Speaker 3>is trying to achieve over a long term period and

0:17:59.520 --> 0:18:01.600
<v Speaker 3>how they're going to get there. There doesn't seem to

0:18:01.800 --> 0:18:05.439
<v Speaker 3>really be a plan. What I would say like to

0:18:05.480 --> 0:18:07.160
<v Speaker 3>see from the government is to come out and put

0:18:07.200 --> 0:18:10.280
<v Speaker 3>their flag in the ground and say, strategically, this is

0:18:10.280 --> 0:18:13.280
<v Speaker 3>what we're aiming for, and these are the policies, whether

0:18:13.280 --> 0:18:15.520
<v Speaker 3>they're uncomfortable politically or not, but this is how we

0:18:15.680 --> 0:18:19.040
<v Speaker 3>go and achieve those plans. Difficult decisions do need to

0:18:19.080 --> 0:18:22.080
<v Speaker 3>be made, which may not make you a popular government,

0:18:22.520 --> 0:18:26.080
<v Speaker 3>especially with your core demographic of voters who perceive non

0:18:26.200 --> 0:18:28.960
<v Speaker 3>doms and the wealthy in some way to be a

0:18:29.080 --> 0:18:31.720
<v Speaker 3>root cause of some of the problems that the country's facing.

0:18:32.080 --> 0:18:34.480
<v Speaker 3>But we have seen other countries have made it work.

0:18:34.520 --> 0:18:37.080
<v Speaker 3>Italy now for the best part of ten years, this

0:18:37.160 --> 0:18:40.560
<v Speaker 3>regime has survived. It's changed slightly. They've doubled the fee,

0:18:40.920 --> 0:18:44.200
<v Speaker 3>possibly in reaction to the fact that there's more demand

0:18:44.320 --> 0:18:46.880
<v Speaker 3>of people who wanting to come there. But I think

0:18:46.920 --> 0:18:51.560
<v Speaker 3>we have lost our way on understanding actually the behavioral

0:18:51.560 --> 0:18:54.720
<v Speaker 3>response of non doms, where it's a much easier now

0:18:54.760 --> 0:18:58.119
<v Speaker 3>to go and find a new home very quickly because

0:18:58.119 --> 0:19:00.800
<v Speaker 3>there are other countries that are looking to buy in

0:19:00.880 --> 0:19:03.800
<v Speaker 3>that wealth and the benefits of that wealth that can

0:19:03.960 --> 0:19:05.160
<v Speaker 3>be generated locally.

0:19:05.880 --> 0:19:07.400
<v Speaker 2>Nimesh, thank you so much for joining us.

0:19:07.560 --> 0:19:08.040
<v Speaker 3>Thank you.

0:19:13.359 --> 0:19:15.680
<v Speaker 1>Thanks for listening to this episode of In the City

0:19:15.720 --> 0:19:19.080
<v Speaker 1>from Bloomberg. This episode was hosted by me Alecra Stratton

0:19:19.200 --> 0:19:22.800
<v Speaker 1>and Francine Laqua. It was produced by Someasadi Moses and

0:19:22.960 --> 0:19:27.639
<v Speaker 1>Am and Tala Armadi. Brendan Francis Newnham is our executive

0:19:27.680 --> 0:19:31.960
<v Speaker 1>producer and special thanks to Nimesh Shah. Please subscribe, rate,

0:19:32.080 --> 0:19:34.399
<v Speaker 1>and review wherever you listen to podcasts.