Wealthy Britons are seeking to move abroad, with many choosing Dubai, ahead of anticipated tax rises UK Prime Minister Keir Starmer has said will be aimed at “those with the broadest shoulders”.
Taxpayers in Britain have been told to prepare themselves for a “painful” budget at the end of October, which is expected to include rises in capital gains and inheritance taxes.
Relocation companies offering services to wealthy clients have reported a surge in inquiries.
Wealth managers have said concerns over the promised tax rises are driving the demand, with separate plans to “close the non-dom tax loophole” by subjecting assets held overseas to British inheritance tax if a non-dom has lived in the UK for more than 10 years, cited as a final straw by some.
Henley and Partners, a British firm which specialises in residence and citizenship by investment, told The Times 4,200 millionaires left the UK in the first five months of the year.
Another 5,300 are expected to go before the end of the year. Most of them are moving to Dubai, according to the company.
But Switzerland, Portugal, Italy and Cyprus are also popular destinations, it said.
A record 6,700 millionaires are expected to call the UAE their new home by the end of this year, according to a recent report from Henley and Partners.
Stuart Wakeling, a director of the company’s London office, told the newspaper: “Lots of people may be happy about the change of government but we have seen a spike of people since the election who want to hedge their bets or have a ‘plan B’.
“There are always a number of factors driving people to move abroad but tax is one of the big ones this year. Others are concerned with the way the UK is going with crime and terrorism. They want something safer and quieter. Some just want a change in lifestyle or better weather.”
The non-dom system, which allows wealthy people to live in the UK and avoid paying tax on their overseas income, was overhauled by the previous Conservative government in March, requiring wealthy foreigners to pay tax on overseas income and gains after living in the UK for four years, instead of the current 15 years.
Labour, which swept to power on a landslide in July, said the changes did not go far enough.
A recent survey by Oxford Economics found that 83 per cent of non-doms said they are likely to leave the UK because of the inheritance tax change.
Oxford Economics said the new rules for both foreign income and inheritance tax, which are due to start in April 2025, could result in a £900 million ($1.1 billion) a year fiscal loss for the government coffers as a “more burdensome” regime prompts a greater number of non-doms to leave the UK.
The country could lose a third of the non-dom population by 2029-2030, it said.
The number of non-doms dropped by almost half in the decade to 2022, partly the result of a 2017 change to the rules that stopped individuals using the benefit permanently. Still, those retaining the status pay almost £9 billion ($11.8 billion) in British taxes a year, according to the latest official data.
Foreign Investors for Britain (FIB) has come up with a set of policy recommendations for the government, including an Italy or Greek-style tiered-tax regime which means non-doms would pay fixed annual fees.
The tiered tax regime should be scaled based on an individual's net wealth, with different brackets and corresponding annual fees. The highest bracket, for example, could have an annual fee of up to £1 million ($1.3 million), it said.
The FIB is also calling for the government to include an inheritance tax break for the duration of the regime, covering both personal assets and those held in trusts.
