Labour’s Fiscal Policy and the Risks to UK Investment

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Juszt Capital Statement on Labour’s Fiscal Policy and the Risks to UK Investment

As a multifamily office advising globally mobile families and high-net-worth individuals on strategic investment in the United Kingdom, and abroad, Juszt Capital is deeply concerned about the fiscal direction being taken under the UK Labour government, particularly the sweeping overhaul of the non-domiciled (“non-dom”) tax regime, which has come into effect from the 6^th April 2025.

These reforms, while framed under the banner of “fairness,” threaten to undermine one of the UK’s most powerful economic engines: the inward investment of internationally mobile capital. Instead of attracting and retaining wealth creators, the new policy trajectory risks pushing them out, penalising long-term investors, and ultimately stifling economic dynamism at a time when Britain can least afford it.

A System Already Under Pressure

These measures arrive in the wake of Brexit, on the Fri, 31 Jan 2020, 11:00 pm, which over the last 15 years has already done considerable damage to the UK’s investment appeal among its European neighbours, and beyond, let’s not fool ourselves that the non-EU deals brokered to date are nothing more than piecemeal contracts. Over the past several years, Juszt Capital has observed a clear decline in inbound investment from continental Europe, as regulatory divergence, trade friction, and uncertainty over immigration and labour mobility have steadily eroded confidence in the UK as a stable base for long-term capital deployment.

Recent

With the Brexit hangover still unresolved and the UK facing intensifying global competition for investment, Labour’s tax plans now deliver a second blow to Britain’s attractiveness. The timing could not be more detrimental.

A Breakdown of the Threats

1. Abolition of the Remittance BasisThe proposed scrapping of the remittance basis, whereby non-doms are taxed only on UK income unless foreign income is remitted, marks a dramatic departure from a long-standing incentive that has underpinned the UK’s status as a financial centre. Under Labour’s plan, non-doms will now face worldwide taxation after just four years of residence. This abrupt shift not only erodes predictability but removes a critical lever of financial flexibility that attracts entrepreneurs and global investors to the UK.

2. Inheritance Tax ReformLabour’s move to transition the inheritance tax (IHT) framework from a domicile-based to a residence-based model is equally concerning. Subjecting international families to UK IHT on their worldwide assets after 10 years of residence, and extending liability for a full decade after departure, is unprecedented, overreaching, and highly punitive. This policy introduces a long tail of tax exposure that will deter long-term commitment and asset anchoring in the UK.

3. Attack on Trust StructuresBy bringing all foreign trust-held assets into the scope of UK IHT, regardless of when or where they were settled, Labour is eliminating the certainty afforded by “protected settlement” structures. This is a direct attack on cross-border succession planning and jeopardises the security of multi-generational wealth stewardship.

4. Withdrawal of Transitional ReliefsLabour’s decision to abandon proposed transitional reliefs, such as the previous government's 50% tax reduction in the first year for exiting the remittance basis, sends a clear signal: this is not a regime interested in easing adjustment or rewarding continuity. Even the promise of investment incentives during the new four-year window lacks clarity, undermining any goodwill the government hopes to earn with potential investors.

Real-World Consequences

Across our global network, we are seeing rising alarm and a visible cooling of enthusiasm for UK-based investments. Finance professionals, innovators, and family offices are openly discussing relocation to more fiscally stable and investor-friendly jurisdictions. Capital is agile. Talent is mobile. These individuals have options, and many are already exercising them.

Top-tier banking executives, as reported by The Times, have raised the alarm that Labour’s tax clampdown is driving elite earners and value creators out of the country. The implications for London’s reputation as a global financial hub are stark: fewer fund launches, reduced property investment, diminished philanthropic activity, and a knock-on effect on the UK’s professional services ecosystem.

When combined with the post-Brexit drag on economic confidence, these tax changes send an unmistakable message: the UK is no longer prioritising international competitiveness. For investors considering whether to establish, expand, or relocate their operations in Britain, the new fiscal landscape is proving a decisive deterrent.

An Unsustainable Path

The notion that the UK can tax its way into prosperity by squeezing a small but disproportionately productive segment of its population is both economically unsound and strategically shortsighted. Instead of creating “fairness,” Labour risks triggering a capital flight that will erode the very tax base it seeks to expand.

Inward investment is not a right, it is earned through trust, consistency, and a globally competitive fiscal environment. These new measures undermine all three.

We hope the government will reconsider the scale and speed of these changes. The UK’s long-term economic vitality depends on remaining open, attractive, and stable for those who wish to build, invest, and contribute. At a time of global uncertainty, Britain must send a message of reliability, not risk