Switzerland rejects 50pc wealth tax over fears of millionaire exodus

Switzerland has rejected plans for a new tax on the super-rich after wealthy residents threatened to leave the country.

Swiss households took to the polls in a referendum on Sunday on whether to impose a 50pc tax on all transfers of money or assets above 50m Swiss francs (£47m).

The proposal was put forward by the Left-wing youth party Young Socialists as a way of raising funds to tackle climate change. It would have affected around 2,500 people, or 0.03pc of the country’s population.

However, initial government estimates suggest that around 82pc of Swiss voters have opposed the move.

The plans, which would have upended Switzerland’s reputation as a low-tax haven, proved highly divisive and were met with staunch opposition from the Government and all political parties aside from those on the Left.

Critics warned that the measures would have damaged the country’s status as a home for the wealthy, adding that it risked a mass exodus of well-heeled individuals that would hit income tax takings and offset any proceeds.

Peter Spuhler, owner of rolling stock giant Stadler Rail and one of Switzerland’s richest people, was among the entrepreneurs who threatened to emigrate if the tax was introduced.

Switzerland has more than nine billionaires per one million inhabitants, more than five times the average for Western Europe, according to a study by UBS.

It also has favourable tax rules for wealthy foreigners that allow them to pay tax without fully declaring what they own.

But the country’s status is under threat from other low-tax hubs such as Dubai, Abu Dhabi, Hong Kong and Singapore, which are competing to lure wealthy individuals and families through generous tax concessions.

Switzerland’s rejection of the tax proposals comes as other countries across Europe take a more aggressive approach to taxing the wealthy.

This includes the UK, as Rachel Reeves last week introduced a mansion tax on properties worth more than £2m.

That followed her abolition of the non-dom regime that allowed wealthy residents to be domiciled outside the UK for tax purposes.

Italy has also stepped up a tax raid on the rich, raising its flat tax on ultra-rich foreigners by 50pc.

France’s parliament recently rejected a Left-wing demand for a wealth tax on households with assets worth more than €100m (£87.6m).

However, the country’s Socialist Party is now drawing up new plans to force rich individuals to lend money to the Government.

They say the measure, which would hit those with an income of more than €1m and net wealth of more than €10m, could raise up to €6bn.

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