Rich planning to '˜safeguard' wealth against Corbyn win

Asset managers and individuals alike are understood to be preparing for a raft of reforms under a socialist cabinet, which could introduce tax hikes on wealth and higher earners, and cancel some bands of tax relief.

Some high rollers are getting ready to move cash out of the UK and into Continental Europe in order to protect themselves from the changes, the Press Association has been told.

Jason Hollands, managing director at Tilney Investment Management Services, said that while Brexit is undoubtedly sparking jitters around UK investments, Labour’s growing popularity is playing its own part.

“The potential election of a hard-left government led by Jeremy Corbyn and John McDonnell is also a factor creating anxiety towards UK investments amongst many of our clients,” he said.

“Many of them are nervous about [Corbyn] and that’s something that comes up as we go around the country and do client seminars and through Q&A sessions,” Mr Hollands told the Press Association.

Some investors have already withdrawn from UK equity funds within the last 12 months.

Pension tax reliefs for more affluent people are also likely to face eradication under Labour, and Mr Hollands says Tilney has been encouraging clients to take advantage while they can.

“There has been feeling for some while that these generous tax reliefs are on borrowed time,” he said.

“All parties have clearly been eyeing this as an area of potential change, but if we ended up with a Corbyn government - and their instincts are much more in favour of wealth taxes than any governments we’ve seen in the UK for some time - you could quite easily understand why they might be the ones to pull the plug on higher tax relief for pensions contributions.”

Concerns about Labour were brought to the fore last year when Morgan Stanley’s European equity team warned investors of the “perceived risks of an incoming Labour administration”.