For the last several decades, the UK has been the go-to location to attract wealth. Its stock exchange rivalled that of New York, it was teeming with investment managers, it was the place to have a second home, and if you were really wealthy, you could relocate there to build on this infrastructure and only pay tax on what you did in the UK. The res non dom rules became synonymous with how to do things. All that changed last week, with unbelievably a Tory government giving notice of their intention to cancel the scheme.
They have chosen to do so at a time that other countries were lining up to copy the idea and try to attract those very same people to their shores. Those impacted in the UK now have a host of countries from which to choose in order to relocate with similar benefits. These include Malta, Cyprus, Ireland, Switzerland, Portugal, Italy, Greece, Monaco, and obviously the channel islands.
One that is not often mentioned, but ought to be, is Mauritius. Nestled just off the coast of Africa, is a nation that has earned its place to be considered amongst that list. Let’s look at some of what it offers.
Mauritius top rate of personal tax is 20% and the top corporate rate is 15%. There is no National Insurance, so the 20% rate versus an effective 45% plus NI of some 10% in the UK is already a win. However, Mauritius has always taxed on world-wide income but only if remitted to Mauritius. Lo and behold, a res non dom system, just without the domicile hassle factor.
There is also no Capital Gains Tax or Inheritance Tax at all. It follows that it is possible to have a Capital Gain offshore and to bring it onshore with no tax impact at all. It also makes it a very attractive retirement location for all those Brits who can now retire there and give up UK residence and completely avoid UK Inheritance Tax once no longer resident for the requisite period.
The health system is good, extremely accessible, and cheap by European standards. There are multiple overnight flights to Europe, with most major airlines servicing it. The island is well connected with fibre optic cable everywhere, a decent legal system, and good investment professionals. You also don’t have to pay £100k a year to access the system.
Obtaining a right of residence is amongst the easiest in the world, from buying a house, to starting a business with $50k, or simply retiring and remitting $1500 pm and you can obtain permanent residence.
Given that the UK seems determined to give up the advantages that just sucked up wealth and helped build an incredible city, you could do a lot worse than considering Mauritius as a very viable alternative.