Rich Europeans eyeing move to tax havens face rise in exit charges

More nations see exit levy as a way to raise revenue and force the wealthy to contribute

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LONDON - The wealthy are exiting Britain in droves for tax havens such as Monaco, Switzerland and Dubai. But many well-heeled Europeans with similar dreams of escape are finding they cannot leave quite so easily.

High-tax nations across the continent are seeking to slow the departure of rich residents by hitting them with a levy on the value of their assets when they depart. Known as exit taxes, the idea is to make them think twice before leaving — or pay their fair share if they do.

Germany, Norway and Belgium have all expanded exit taxes in recent months or are weighing proposals to do so, while in October the Dutch Parliament asked the government to study the levy as part of plans to tackle tax avoidance. And in Britain, Prime Minister Keir Starmer's Labour administration has faced calls to impose a similar levy to help stem a flood of wealthy residents from the country.

Exit taxes seek to take a cut on the capital gains or profits an individual has built up on assets, under the argument that they are fair payment for use of the country's resources.

An increasing number of nations see them as a way to raise revenue and force the wealthy to contribute.

But they are also controversial because they force investors to pay tax — perhaps in the millions or even billions of dollars — on assets that have not yet been sold.

"A lot of countries are bringing in exit taxes," said Mr David Lesperance, founder of wealth management consultancy Lesperance & Associates in Poland. "Clients who have illiquid assets and mortgages are then hesitant to trigger them because they just don't have the money to pay the bill."