Ferrari has cut the number of cars it sells in the UK as wealthy individuals relocate overseas after tax changes and the abolition of non-dom status.
The Italian luxury carmaker reportedly began limiting the number of vehicles it exported to the UK about six months ago, in an attempt to stop a decline in their residual value.
Benedetto Vigna, the chief executive of the carmaker, said that Ferrari had seen a “stabilisation” in sales after its decision to reduce the number of vehicles it allocated to the UK.
“Some people are getting out of that country for tax reasons,” he told the Financial Times, adding that taxes were not the only reason for the fall in residual values. “There are many different factors. Maybe when you sell to the UK, that car cannot be sold somewhere else [because of its right-hand wheel]”.
In April the government abolished favourable tax treatment for non-domiciled residents – UK residents who declared that their long-term home was overseas to avoid paying UK taxes on global income and assets – and raised other duties on wealthy people.
The chancellor, Rachel Reeves, told the Guardian earlier this week that talk of an exodus of wealthy residents was just “scaremongering”.
“This is a brilliant country and people want to live here,” she said. “And I think, when people scaremonger again this year, we should take some of that with a pinch of salt.”
Reeves, who has said that wealthy people would be one of the targets for higher taxes in next month’s budget, has previously ruled out imposing a wealth tax, but campaigners for changes to the system have highlighted other options.
These include raising the rate of capital gains tax, levying national insurance on rental income and on partners in law firms and consultancies, and creating higher council tax bands.
The non-dom tax changes prompted fears that Ferrari would lose its wealthy client base, leading to volatility in its residual prices, or the expected secondhand value of a vehicle when a leasing deal comes to an end.
Most new cars in developed markets are bought on deals that provide financing based on the amount of value a vehicle loses – its depreciation – rather than the overall sticker price.
If cars have weaker secondhand prices, the financing needed increases and the car becomes more expensive to lease.
The residual value for Ferrari’s Purosangue model fell 12.2% between January and October, while the SF90 Stradale fell 6.6%, according to AutoTrader.
However, prices have started to stabilise in recent months. The Ferrari 296 GTB, a supercar launched in 2022, had a recommended retail price from £256,275 if bought new. However, a used version was available from £189,490 on AutoTrader.
