Labour has inherited a fiscal crisis, so let’s capitalise on a Brexit benefit and adopt an exit tax
'Tax the rich' sign at a protest, March 2025 (Credit: Eleventh Hour Photography/Alamy Live News)
4 min read
Recent years have seen fervent debate over the prospect of implementing a wealth tax in Britain.
The argument goes that we tax work to a far greater degree than we tax wealth, and that wealth inequality has widened significantly in recent decades. Detractors of a wealth tax say it is not feasible because wealthy people will simply move their assets overseas.
Those critics have a point – but is it good enough to simply accept this as a fact of life? Do we not have a responsibility, as a Labour government committed to the redistribution of wealth and power across our country, to refuse to accept a situation where the dreaded phrase ‘difficult choices’ is designed almost exclusively for ordinary people in our communities, while the super-rich remain insulated from economic shocks and fiscal constraints?
It may well be premature to implement a wealth tax, but in the spirit of tackling the drivers of capital flight, I believe it’s time we confront this injustice head-on – with a fair and principled exit tax.
The idea is simple: if you’ve built your wealth in Britain, you should not be able to walk away from your tax obligations the moment you book a one-way flight to Monaco. An exit tax would ensure that those who have benefited most from our public infrastructure, workforce and legal protections contribute their fair share before they leave.
This is not a radical proposal. Countries like Australia, Canada and the United States already levy exit taxes on individuals who emigrate with significant assets. These taxes are designed to capture unrealised capital gains – profits that have accrued while the individual was a resident but remain untaxed due to their departure. The UK, by contrast, allows wealthy emigrants to sidestep Capital Gains Tax entirely, costing the Treasury an estimated £500m annually.
Historically, the UK has not had an exit tax due to its incompatibility with EU membership’s free movement rules. We now have a unique opportunity to capitalise on this unrealised benefit of Brexit.
The Centre for the Analysis of Taxation (CenTax) has proposed a model that would rebalance this injustice: rebasing assets on arrival and taxing deemed disposals on departure. It’s a pragmatic solution that would protect revenue without penalising ordinary migrants. The Resolution Foundation has also endorsed an Australian-style exit charge, arguing that it would help close the growing gap between income and capital taxation.
Critics claim an exit tax would drive away investment or punish success. But let’s be clear: this is not about penalising ambition – it’s about defending fairness. Working people in Crewe and across the country pay their taxes every month. Why should billionaires be allowed to skip the bill simply because they can afford a tax lawyer and a private jet?
The argument that an exit tax would deter investment is a red herring. Investors value stability, infrastructure and skilled labour – none of which are undermined by a modest tax on unrealised gains. What truly undermines confidence is a system that rewards avoidance and erodes the social contract.
This Labour government has inherited a fiscal crisis. Public services are stretched, councils are collapsing, and inequality is deepening. An exit tax won’t solve everything, but it’s a vital step towards restoring justice in our tax system. It sends a clear message: if you profit from Britain, you pay your dues to Britain.
As socialists, we believe in solidarity – not just within borders but across classes. The exit tax is not about envy or punishment. It’s about fairness, responsibility, and the belief that no one is above contributing to the common good.
Let’s tax the exodus – and build a Britain that works for everyone, not just the few who can afford to leave.
Connor Naismith is Labour MP for Crewe and Nantwich
