Wealthy people worldwide have in recent times been affected by at least ten different forms of new or heavier taxations, concludes a report from accounting and consulting giant EY.
Recent research from BCG shows that the total number of millionaires worldwide is increasing. In 2013 16,3 million households were able to call themselves ‘millionaires’. In the UK there are around 513,000 millionaire households, making the UK number four in terms of the number of millionaires per country.
This group of high wealth individuals is however finding themselves under increased wealth taxation pressure, reveals a study from EY based on a study of the taxation systems of 16 developed countries. Governments worldwide are looking for ways to plug holes that have appeared in their budgets, and with a total wealth of $19.3 trillion in private hands, a considerable tax income could in theory be extracted from this wealth. The research from EY, entitled ‘Wealth under the spotlight 2015’, shows that in practice this indeed is the case.
The research shows that governments are levelling new and heavier taxes, which tend to affect wealthier individuals. Examples include increased taxation on dividends and property, a decrease in level at which people are considered rich and increased tax rates on capital gains. Furthermore, international information exchanges mean that tax avoidance is more stringently tracked and controlled. In this way High Net-Worth Individuals (HNWIs) that don’t follow the complex tax laws, will need to expect higher penalties – and charges if fraud is suspected. One unexpected result from the research is that in half the countries, there is no taxation on inheritance.
EY expects that the cool eye of governments, media and other interested parties will continue to be directed toward wealth individuals. With new laws complex and varied in degree according to EY, and their implementation sometimes ad hoc, the consultancy recommends HNWIs to be careful with their finances and to keep their administration in order.