British investors face £5bn blow from Trump's ‘big, beautiful bill'
British investors are facing a $7bn (£5bn) tax blow from Donald Trump's 'big, beautiful bill', analysts have warned.
The UK Government alone could have to pay $400m a year as part of the 'revenge' tax outlined in the Republican tax and spending bill that has recently been passed by the House of Representatives.
Mr Trump's bill is set to charge a retaliatory tax on some foreign investments made by entities from countries that the US deems to have 'unfair' tax systems – which includes the UK.
The tax, known as Section 899, would levy a 5pc rate on gains made by UK investors – a rate that will increase by five percentage points each year up to a maximum rate of 20pc.
Crucially, analysts have warned the wording of the policy documents open the door to taxing interest earned on holdings of US Treasuries, which are usually tax-exempt.
The UK will be hit particularly hard if America starts charging a new tax on yields from US Treasuries because of its vast ownership of this debt.
Britain recently overtook China as the world's second largest holder of US Treasuries, behind only Japan. UK entities, such as pension funds and private investors, hold a total of $779bn in US government bonds.
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The Independent
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