Like other major economies in 2020, the UK is facing a significant fiscal shortfall as a result of COVID-19 and the severe contraction in economic activity. With traditional revenue streams under pressure, policymakers are increasingly considering new approaches to taxation and revenue generation.

The possibility of greater taxation of wealth is therefore becoming an increasingly important issue for investors and entrepreneurs. As governments face unprecedented levels of public expenditure and debt, previously unthinkable tax measures are likely to receive greater consideration.

One potential alternative model is Portugal’s Golden Visa Programme, which connects investment with residency and includes a fund-based route. Under the rules introduced in 2017, qualifying investors could obtain residency through a €350,000 investment in eligible investment or venture-capital funds, with the funds required to direct at least 60% of their investments into Portuguese companies.

The significance of this model is that it connects immigration with a financial product capable of directing capital into the wider economy, while potentially providing investors with greater liquidity and diversification than a direct property investment.

The UK and other governments facing similar fiscal pressures are likely to continue reassessing their tax structures. For wealthy individuals, this makes international diversification, residency planning and alternative investment structures increasingly relevant.

The broader question is whether governments will seek simply to tax existing wealth or develop policies capable of attracting and retaining productive private capital. That distinction may become increasingly important as the post-COVID fiscal environment develops.

This issue also forms part of a wider international trend. India, for example, had already begun moving toward a more expansive approach to taxation based on an individual’s connection with the country rather than simply the location of particular assets.

For investors, the message is straightforward: tax policy is becoming an increasingly important factor in determining where capital, businesses and individuals choose to locate.