When we published our first article on the Beckham Law in the Tax Journal, back in 2004, our English colleagues were amazed.

Spain was developing legislation to attract international footballers, taxing them effectively at 24% and giving them a worldwide tax exemption on international income. Being the international exemption similar to the non domicile regimen in England in the good old days.

The legislation in Spain and UK was then equally favorable to attract international talent and not only footballers - with the due respect for football.

Things have changed and will be changing in the  UK with the introduction of hefty tax rules affecting non domicile, trusts and anyone making an income over 150,000 GBP. In Spain, the PM is announcing similar measures, in line with a Europeanwide trend on Taxation Policies, which we can not support.

With the introduction of the highest rate of 50% in the UK, for income over 150,000 GBP, entrepreneurs are starting to leave the country or changing plans to develop any businesses in the UK. If an international entrepreneurs or a footballer has got the option to live in Spain with a 24% income tax versus the UK with a 50%, the tax planning suggestion is a non brainer.

To get some perspective on what the 50% income tax could mean for an economy I recommend to read “Coffee planters, workers and wives: class conflict and gender relations on Sao Paulo plantations, 1850-1980″ Macmillan Press, 1988. In the book there is a graphical explanation of the evolution from slavery (room and board) toward share croppers concepts (50:50 after expenses), which evoke somehow the direction the EU governments are heading towards.

An interesting reflection on tax and slavery is also available at http://www.press.uchicago.edu/Misc/Chicago/194876.html