[Image: Sygnia]
South Africa’s richest self-made woman has thrown down the gauntlet – and it’s aimed squarely at the UK Treasury.
If Chancellor Rachel Reeves backs off her plan to slap an inheritance tax on non-doms’ global assets, billionaire businesswoman Magda Wierzycka says she’ll happily cancel her UK exit strategy.
“I would absolutely stay,” Wierzycka told City AM, swatting away any idea that she’s running from the taxman. “And it’s not about protecting my money from the tax man. I pay all my taxes, but South Africa has foreign exchange controls and I don’t know whether [my estate] would be able to pay the IHT bill under the current rules.”
In short: she’s not dodging, she’s just not keen on paying a bill her home country might not even let her settle.
The founder of UK venture capital firm Braavos had planned to join the stampede of wealthy non-doms sprinting out of Britain, but is now watching Reeves with one eyebrow raised and her suitcase only half-packed.
And she’s not alone. The Treasury is reportedly sweating the mass non-dom exodus, with City AM insiders whispering that a major U-turn might be on the cards. One particularly controversial move under review? Scrapping the newly enforced rule that drags non-doms’ foreign-held assets – including those squirrelled away in offshore trusts – into the UK inheritance tax net.
The numbers don’t exactly scream jackpot either. According to the Office for Budget Responsibility, the global-IHT move would raise a meagre £200 million a year. Pocket change, really, in government terms. And for that, they’ve managed to scare off a glittering roster of the global elite, including steel magnate Lakshmi Mittal and Goldman Sachs bigwig Richard Gnodde.
Anthony Whatling, managing director at Alvarez and Marsal, summed up the collective wince: “The inheritance tax change is perceived by many as the most contentious aspect of the non-dom reforms. If the government wants to keep wealth – and the business that follows – in the UK, this is the lever it needs to pull.”
Former Treasury economist Chris Walker went a step further, calling the policy a revenue black hole in the making. “IHT seems to be the straw that’s breaking the camel’s back and causing non-doms to leave,” he said. “I don’t believe the current position is maximising tax revenues from non-doms, which would have been one objective of the reform.”
In other words: congratulations, you’ve managed to raise taxes and lower income at the same time.
Even the lobbyists are chiming in. Leslie Macleod-Miller, who heads up Foreign Investors for Britain, warned the move was essentially economic self-sabotage: “Draconian UK taxes levied upon overseas assets will only lead to capital flow, businesses closing, philanthropy ending and intellectual capital leaving the UK for good.”
Wierzycka, who co-founded South African asset manager Sygnia and was planning a full circle return home, told City AM she’s still holding onto her British business ties by a thread – and her next fund could hinge on her postcode.
“I have investors who would put money into our fourth fund, but who want me to be in the UK, as it’s me who has the relationship with them,” she said.
Braavos, by the way, just sold a 13% stake in Oxford Ionics – a quantum unicorn – to US competitor IONQ last week. Not exactly the kind of firm Britain should be pushing out the door.
A Treasury spokesperson gave the usual soft-shoe shuffle: “The government will continue to work with stakeholders to ensure the new regime is internationally competitive and continues to focus on attracting the best talent and investment to the UK.”
I guess they’re watching Magda’s boarding pass.
[Source: City AM]
