With calls growing for tougher sanctions to be imposed on wealthy Russian individuals with interests in the UK following the nerve-agent attack on two Russians in Salisbury earlier this month, Shadow Chancellor John McDonnell said that a special tax now needs to be imposed to hit Russian oligarchs ‘where it hurts’ – financially.
The Labour Party has called for Chancellor Philip Hammond to introduce a five-point plan it has proposed for an ‘oligarch levy’, which it claims would raise nearly £1 billion per year by targeting the wealth of super-rich Russians, in particular UK-based residential property owned through offshore trusts and companies.
The party’s proposals include the introduction of a transparent ‘beneficial ownership register’, similar to the UK’s, which would detail who ultimately owns assets via trusts and companies in the Crown Dependencies – Jersey, Guernsey and the Isle of Man – and British Overseas Territories, such as Bermuda and the British Virgin Islands.
Mr McDonnell said that offshore finance centres are often used as a ‘hiding place’ for the wealth of oligarchs.
‘If we want to really take the fight to the gangster politicians and Russian elites hiding their money in the UK, then we need serious measures like the “oligarch levy”, which will hit them where it hurts – in their wallets,’ he said.
‘It’s time to call an end to the use of our financial system and property market as a hiding place for rich foreign oligarchs and their money men by implementing measures like full transparency for tax havens and our levy on secret offshore property purchases.’
He added: ‘The next Labour government will take a sledge hammer to money laundering and tax avoidance, and call an end to the exploitation of our financial system and property markets by the global elites.’
A statement released by the Labour Party says that the oligarch levy would be used to tax ‘secret offshore purchases of UK residential property’ and would ‘strengthen the UK’s hand in imposing effective sanctions on Russia’.
‘[The proposed levy would be] similar in principle and application to the 15 per cent levy recently introduced in Toronto on foreign property owners or that Singapore and Hong Kong have maintained for many years,’ the statement says.
‘However, this tax would be more tightly focused on specific forms of ownership associated with money laundering and tax avoidance. If introduced now, newly obtained figures suggest this could have a very direct impact on such properties owned by Russian oligarchs. Independent experts estimate this tax could raise up to £875m a year from Russian oligarch sources.’
At the time of writing the Chancellor had not replied to Labour’s proposals.
