Yahoo Finance ‘I’d rather stay in Communist China than return to inheritance tax Britain’
Paul Mosely is desperate to return to Britain with his wife. After a life mostly spent working in Beijing, China, the 70-year-old yearns for “England’s green and pleasant land”, but the looming threat of inheritance tax is keeping him away.
He says: “We would consider it fair enough to succumb to UK taxes on our pensions and investments, as being a price worth paying, but there is no way my wife, upon her eventual demise, will donate 40pc of her assets to the Government for them to waste.”
The Telegraph is campaigning to scrap the divisive 40pc death duty. More than 50 MPs including Liz Truss and Nadhim Zahawi have now called on Prime Minister Rishi Sunak to abolish it.
Mr Mosely, originally from Essex, first went to China in the 1970s as a PhD engineering student, and like many others in the brain drain of the era, he stayed there as his employer at the time paid his living expenses.
Promotions came thick and fast, and Mr Mosely planted roots. By 2003 he was the general manager of a sustainable mining company based in Beijing.
Mr Mosely married locally in the 1980s, and together he and his wife Xiaomo raised a bilingual family while he invested his earnings without the threat of capital gains tax.
Conscious that any money he left after his death would be taxed at 40pc, Mr Mosely, who is still domiciled in the UK, transferred his money to Xiaomo, now 63.
Ms Mosely has invested the funds, making sure to keep them outside the UK.
China has no inheritance tax laws whatsoever. The only taxes that apply after death are to property: a wealth transfer fee that accounts for roughly 10pc of a property’s value. In addition, beneficiaries who sell an inherited house must pay 20pc tax on the income.
Britain’s basic allowance for inheritance tax has been frozen at £325,000 since 2009. This, combined with a boom in house prices over the past decade, has dragged a rising number of ordinary families into paying the tax.
Among Tory MPs urging the Prime Minsiter to axe inheritance tax here in Britain is Craig Mackinlay, the Conservative MP for South Thanet.
He says: “The Treasury’s attachment to inheritance tax is looking increasingly out of step with any internationally comparative tax system.
“It is a tax on aspiration, a brake on growth and not consistent with Conservative values.
“If social democratic Sweden and Communist China can manage without it then so can we. We should be bold enough to scrap it.”
Inheritance tax only applies to taxpayers who are domiciled in the UK – and despite living in Beijing for most of his life, Mr Mosely remains domiciled here.
His estate, divided across property, stocks, and shares, will certainly incur a hefty inheritance tax bill.
“We have three properties in Beijing, one in England, and one in Portugal,” he says.
“I’ve put as much of it in my wife’s name as possible but my worry is that because I am male and older, I will die before she does.”
Mr Mosely says Xiaomo will likely move to Britain if she is widowed. He says: “By the time she dies, she could have been living in the UK for 15 years, and then she’ll be subject to inheritance tax.”
In the meantime, Mr Mosely says he is miserable. Beijing has lost its appeal now that he is retired – and he wants to live out the rest of his years in Kent, where he and his wife own a house.
“I don’t see anything wrong with paying income tax on pensions – that’s fair do’s. But if inheritance tax is going to keep us away then the UK doesn’t even get the other tax.”
