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Published on May 8th, 2009 | by john.weir

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Brits flee to New Zealand to avoid 50% tax on rich

It is expected that as many as 250,000 of the UK’s highest earners will escape the country to avoid the financial implications of the higher tax rate of 50% for the rich, which was announced at the recent Budget. Commentators predict that many of them will flee to New Zealand, where the higher band of tax rate currently stands at only 39%. This figure is lower than Australia’s own super rich tax of 50% and most EU countries’, including Germany (50.5%), Spain (43%) and Denmark (59%).
 
As well as better weather and a higher standard of living, Brits are being further tempted to move to New Zealand because of the number of jobs on offer. New Zealand is actively crying out for skilled workers and its Government currently cites a need – and vacancies – for professions as diverse as engineers and midwives to tandem skydiving instructors and jockeys.
 
New Zealand’s level of unemployment is currently 4.7%, compared to 6.7% in the UK. What’s more, The Land of the Long White Cloud entered into a recession earlier than the UK and is therefore expected to return to positive growth earlier than most developed countries, including the UK
 
Interest rates are also higher meaning a better return on investment for New Zealanders. The Official Cash Rate there is 3%, which is equivalent to the Bank of England’s base rate of 0.5%. The Auckland Savings Bank is currently offering 5.25% on a two-year deposit account and many other banks are offering similar deals. The New Zealand government itself has further announced a scheme whereby it guarantees existing and new deposits of up to $1million per person in approved institutions.
 
The number of Brits moving permanently to New Zealand has rocketed by 20% over the last year. A total of 8,300 people migrated to the UK in the last 12 months, compared to 6,900 in the previous year.
 
Many more Brits enter New Zealand under the country’s Working Holiday Scheme, which was recently extended to 23 months – considerably longer than Australia’s 12-month scheme.
 
Auckland on New Zealand’s North Island recently came fourth in the Mercer 2009 Quality of Living Survey, whilst the country’s capital, Wellington, came 12th. London came 38th in the survey. The research covered 215 cities and was based on criteria including political, social, economic and environmental factors.

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