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This weekend, in Rome, a draft 2027 Budget was released by Giorgia Meloni’s Government which included the introduction of a 26 per cent capital gains tax levy on individuals who move their residency abroad. While there are various nuances and exemptions to the proposed exit tax, and while it may not end up being implemented, it could potentially ensnare many British expats who have moved to Italy in recent years.
So unexpected was the announcement that the groans of disbelief from “Amalfi coasters” as they spat out their negronis was audible as far as Monaco and beyond, a vitriol of which can only be matched by a Neapolitan being served pineapple on a pizza. The irony of course is that British wealth beaters have driven our millionaires straight into a line of waiting Italian guns, many of whom left Britain in the first place because of tax and may well now be back on the phone to their tax advisers once again.
While there is no guarantee that this exit tax will eventually land, it begs the question: how long can ultra-tax-friendly jurisdictions remain that way before either political or financial pressures push the dial too far? And is it possible that this becomes a trend where we might see further fiscal manoeuvring in other favourable jurisdictions trying to balance the books or the voters? Most importantly, what will our Westminster incumbents think of it? An opportunity to implement the same or an opportunity to lure some lost game back to British shores? Only time will tell.
But for now, future expats should be served a warning that tax-friendly regimes may well be friendly on arrival but there is no guarantee they will remain so in perpetuity or when you decide to leave.
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