For many of our clients, “home” is more than a postcode. It is a personal and business community that providers for them a sense of identity.
Recent UK tax changes have tested the attachment that many clients have to the UK and they are asking themselves : “when does my ever-growing tax liability outweigh the psychological anchor of home?”
A recent study found that 16,500 millionaires with an estimated wealth of $91.8 billion[1] are set to leave the UK in 2025. In our experience, the wealthy families are not leaving the UK on a whim (for example due to a single new tax announcement) but because of a sense of “unease” that has developed over recent years.
A rise in national insurance contributions or the loss of VAT relief on school fees might have been tolerated in isolation, but when added to frozen income tax thresholds, shifting pension rules, uncertainty about inheritance tax, failing public services and a growing sense that the UK does not support business owners, many are concluding that the social contract, for them, has broken; despite their ties to the UK, it is simply not worth the cost to stay.
Whilst the precise figures are disputed, tax practitioners are noting that those leaving the UK now include not just those who were referred to as “non-doms” but many British citizens who have developed successful businesses here.
However, is it all one-way traffic? One report concludes that by 2028 the UK will still be home to 2,542,464 millionaires[2] and it is often said that for many, the rich culture, excellent school system and need for continuity more than outweighs higher taxes. Perhaps the UK’s new FIG regime will attract wealthy business owners to the UK and compensate for the exodus? Moreover, it is by no means clear that the tax regimes of Portugal, Spain and Italy which are so attractive for many will continue; this month, EU representatives will discuss a proposal (supported by France and the Netherlands) that jurisdictions offering favourable tax regimes should be assessed by the EU Code of Conduct group which, since 2017, has managed a list of “non-cooperative jurisdictions for tax purposes” (often called the “EU Blacklist”). Perhaps the need to fund public sector deficits will pressure these favourable tax jurisdiction to become less favourable in the future.
In addition to tax and the concept of “home”, key drivers for our clients include security and a reliable legal regime. Recent months have demonstrated that clients will relocate quickly if it is for their benefit and that of their family to do so. Many international clients want to live in the UK and many who are here do not want to leave – but they will. In a fast-changing fiscal landscape, the UK government has an opportunity to introduce a balanced and stable tax regime that can enhance the UK’s attractiveness. There seems no time like the present to do so.
[1] Country Wealth Flows, Henley & Partners - Country Wealth Flows | Wealth Migration 2025 | Henley & Partners.
[2]
Adam Smith Institute, Millionaire Tracker — Adam Smith Institute
