As the year draws to a close, the team at Martyn Fiddler likes to reflect on the events of the past twelve months—to see what we can learn, and perhaps, what we should learn to forget.
The dominant theme this year has undoubtedly been the widening gap between rich and poor, accompanied by intensifying calls for equality. NGOs, the media, and academics are united in their discussion of wealth and luxury taxes. A group of 30 MPs recently claimed a wealth tax could raise £24bn annually in the UK. Tax Justice went further, claiming $2.1trn could be raised globally.
The rhetoric is sharp. As stated in Oxfam’s October 2024 report, Carbon Inequality Kills: “The super-rich must foot the bill for their carbon footprint, not ordinary Europeans. This means more taxes on the super-rich, like wealth taxes, and higher taxes on superyachts and private jets. Carbon Inequality Kills” – Oxfam report 29 October 2024.
The Legislation Bites
In 2025, governments took the bait. The UK Government’s budget revealed significant increases in Air Passenger Duty (APD). While commercial flyers face a 13% increase starting April 2025, those flying on business jets face a massive 50% hike. This translates to a tax of £84 to £673 per passenger departing the UK on a business aircraft, compared to just £14 to £224 for commercial flyers.
France followed suit with the ‘Chirac tax’ surcharge effective March 1, 2025. For business aviation, the tax jumped to €2,100 per passenger for long-haul flights, while commercial business class tickets saw a rise to just €200.
The Philosophy of Plucking the Goose
The logic of a luxury tax, a surcharge on non-essential goods accessible only to the wealthy, seems irresistible to voters. It promises to reverse inequality and reduce the burden on the needy. Unlike building hospitals, wealth tax proposals are free to create and can be as extravagant as politicians wish.
But do they work? Jean-Baptiste Colbert famously declared that the art of taxation consists of “plucking the goose as to obtain the largest possible number of feathers with the smallest possible amount of hissing.”
The Risk of Capital Flight
The wealthy already shoulder a historically high proportion of the burden. The top 1% of UK earners contribute roughly 29% of all income tax. While incremental indirect taxes cause “small pain,” there is a tipping point where the pain becomes sufficient to trigger an exit.
We are arguably seeing this now. Steel magnate Lakshmi Mittal (£15.4bn fortune) has left the UK after 30 years, citing the end of the non-dom regime. Nik Storonsky, founder of Revolut, is moving to the UAE. With a potential stake worth £14bn, Storonsky would have faced a Capital Gains Tax liability of up to £3.4bn in the UK. That single figure represents roughly a quarter of the UK’s total annual CGT revenue.
They join nearly 1,000 HNWIs who have relocated from the UK to Dubai.
Complex, onerous tax regimes often achieve the opposite of their intent: driving away the very contributors who fund the state. However, the momentum is unlikely to slow down. The era of “tax the rich” is here, and it does not look like it will be reversed anytime soon.
The Martyn Fiddler take on ‘taxing the rich’
“Tax the rich” has moved from slogan to policy with steep aviation duty hikes in the UK and France. However, as the top 1% already fund 29% of UK income tax, onerous new regimes are triggering a tangible exodus of HNWIs. As high profile departures accelerate, the cost of “taxing the rich” may be the tax base itself.
If you would like to learn more about what Martyn Fiddler can offer when it comes to owning, buying, or selling high value assets, please contact hello@martynfiddler.com
