As detailed in this section previously, tax cuts in the US look set to create a gap in UK and US markets. Will the UK lose out.
United States fiscal policy has been amended with regard to taxation of dividends from shares and capital gains tax. The US new tax regime means that US investors will pay no more than 15% tax on dividends and capital gains. This compares to the UK with rates of 32.5% maximum on dividends and 40% on capital gains.
Our view
An interesting financial World is on the horizon. The above figures are not entirely fair. The Chancellor massively improved capital gains tax taper relief a couple of years ago meaning that maximum relief could be obtained on business assets after just two years - meaning an effective rate of tax of just 10% encouraging both UK and Overseas investment in the UK.
Whilst in Euroland, they "pussy foot" with EU Market Directives trying to prevent one member nation e.g. us from offering better taxation terms than another effectively reducing the demand for people to shop around for the best "taxation home" and place investments in other countries or other, the US however takes action. They have made a significant move to make investment in US markets extremely attractive for US residents by halving taxation!
Expect some recovery in the US.