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Karina's Column

An insider’s view on the City of London and beyond

Ode to London


A look at exile and taxes

“You cannot tax me out of London,” says a retired top banker who has made a considerable amount of money in his lifetime. HMRC, the UK’s tax collecting body, will be glad to hear that. Not least because an extreme-left government and a wealth tax are looking more probable than they were a few years ago.

As the growth estimates for the British economy are downgraded amid Brexit uncertainty, tax-exile Portugal, where foreigners with assets pay minimal tax, might be an attractive option for some, or even other cities on the European continent. Rather more attractive than locations like built-up Gibraltar or small, floating islands of minimal culture and maximum sun.

But oh, the wrench of leaving London! The city with its blend of multiracial, multi-world events and people, with its magnificent mix of high and low culture, with antiquity and modernity oozing from its pores…

No more could I attend the Dog Party at George armed with a Paddington Bear-like Norfolk Terrier. In the heart of Mayfair on an autumn evening, bejewelled owners appear with their pooches big and small to raise funds for the Dog’s Trust. Elegant waiters in white vests and long aprons offer trays of canine treats, paying no heed to the bottom-smelling that is going on around their ankles. Owners take advantage of the free dog training class, where their pets will behave impeccably – behaviour never to be repeated outside the doors of the private club.

Lisbon, can you offer that?!

A wealth tax is relatively easy to implement. It would affect many professionals who would not consider themselves “wealthy”. Over half a million homes in the UK are worth over £1m, with the majority of those concentrated in London and the South East. In France last year, an annual wealth tax of 0.5% was payable on those with a total net wealth between €800,000 and €1.3 million, rising to 1.5% with wealth over €10m.

In exile, no more could I attend public lectures at the London School of Economics and hear Nobel Prize winners cum Heads of State like Juan Manuel Santos, an LSE-graduate, talk about the state of the world and submit to questioning from eager students.

Geneva, can you offer that?!

Also at the London School of Economics, Dr Cristobal Young of Stanford University last month presented his findings from the first large scale study of tax exile. He looked at 45 million US tax returns along with the Forbes rich list. His conclusion was that, despite conventional wisdom, the actual migration of the rich when taxes are high is limited. Ed Miliband, the former leader of the Labour Party was present for the discussion and this will no doubt be fed into party policy.

No more could I go to a little church on Walton Street to see Mark Rylance, the foremost Shakespearean performer of his generation, supervising a three-hour workshop with actors from disadvantaged, ethnic minority backgrounds who belong to theatre group Intermission, which also works in prisons and in schools. They stage plays like Verona Road, an interpretation of Shakespeare’s Romeo and Juliet, using street language mixed with Shakespeare’s immortal lines. The audience reaction is rarely other than a standing ovation. All for £16.

Luxembourg, can you offer that?!

No more could I drink mediocre, warm wine at The Amorist’s party in a small gallery, where an 80-year old lady in fishnet tights and excessive makeup lambasted a speaker for not mentioning love in his discourse on sex. The Amorist magazine “has been created for readers who want to lose themselves between the sheets of a publication that’s as romantic about sex as it is discursive, philosophical, truthful, wayward, wry, flirtatious, occasionally baffled and downright engrossed.”

Frankfurt, can you offer that?!

And, the cheapest entertainment of all would be no more: walking along the streets of London, forever being distracted by looking at the vast range of London faces and wishing I was a sculptor.

In the immortal words of man of letters Samuel Johnson, “Why, Sir, you find no man, at all intellectual, who is willing to leave London. No, Sir, when a man is tired of London, he is tired of life; for there is in London all that life can afford.”

They are as relevant in 2017 as in 1777.