Millionaires fear tax rises more than inflation, new survey finds

Higher taxes are now the biggest perceived threat to Britain’s millionaires, according to a new survey.

Almost half of those asked in July, in a new poll by investment service Wealth Club, say higher taxes pose the greatest risk to their fortunes, while a further 26 per cent cite future government policy as their biggest concern.

In contrast, only 9 per cent identify geopolitical events, which include conflict or global market crashes, as the greatest threat to their wealth and just 3 per cent point to inflation or market volatility.

The findings come as chancellor John Healey prepares to deliver the autumn Budget on 28 October.

Having pledged to take "power and money out of Westminster, and into every postcode around Britain", the new Labour government is widely expected to announce further tax changes targeted at the super-rich.

With this, almost every millionaire out of the 341 surveyed expects taxes to definitely or probably rise over the next year.

Inheritance tax emerges as the biggest concern, with 22 per cent saying potential changes worry them most. A further 21 per cent are most concerned about the introduction of a wealth tax, while 18 per cent cite possible increases to capital gains tax.

In spite of these concerns, wealthy investors remain relatively optimistic about the UK stock market.

More than a third believe UK shares are undervalued and offer attractive long-term investment opportunities, while 36 per cent believe they are fairly valued.

Confidence in the wider economy, however, is far weaker. Seven in 10 respondents, all of whom have a net worth of at least £1 million, say they are either "not very confident" or "not confident at all" about the UK’s economic outlook over the next 12 months.

Nearly six in 10 expect the Bank of England to raise interest rates in the coming year, while 63 per cent believe inflation will increase.

Alex Davies, founder and chief executive of Wealth Club, said: "It is deeply worrying that millionaires now see tax and government policy as a bigger threat to their wealth than inflation, market volatility or geopolitical events.

"That is an extraordinary finding and suggests that confidence in the UK’s economic direction is already at a very low ebb.

"Governments inevitably face difficult choices and must balance the public finances. However, every increase in the tax burden and every policy change that makes Britain a less attractive place to save, invest and build businesses risks further undermining confidence."

The survey comes amid growing debate over how Britain’s wealthiest should be taxed.

Last month, 120 members of Patriotic Millionaires UK, including former England captain Gary Lineker, wrote to Andy Burnham urging him to increase taxes on the super-rich.

The campaign, which includes screenwriter Richard Curtis and former trader Gary Stevenson, calls for a 2 per cent tax on wealth exceeding £10 million, to “fight the destabilising impact of inequality” and build a “just, stable, and inclusive economy”.