In 2024, the UK witnessed an exodus of 10,800 millionaires, a net outflow second only to China. This mass departure was primarily triggered by tax changes under the Labour government, including plans to abolish the “non-dom” tax status.
This policy allowed certain wealthy individuals to avoid UK taxes on their offshore income. Instead, a new system would permit tax-free entry of foreign wealth into the UK for four years but would later subject all assets to taxes, including inheritance tax.
The outflow predominantly included high-net-worth individuals, with 78 centi-millionaires (those with at least £100 million ($121.7 million) and 12 billionaires leaving the UK. Many relocated to tax-friendly nations like Switzerland, Italy, and the UAE, which have policies attracting wealthy residents.
For instance, the UAE offers zero income tax and “golden visas” for investments, making it a popular destination for the wealthy. Similarly, Italy and Switzerland provide favorable tax systems for high-net-worth individuals.
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The exodus also reflects dissatisfaction among business leaders and investors, who cited high tax burdens and reduced allowances for dividends and capital gains as reasons for leaving.
These policies, coupled with frozen tax thresholds, were seen as punitive to wealth accumulation.
Critics argue that these changes could shrink the UK’s tax base by driving out its wealthiest residents, potentially undermining the government’s tax revenues.
Proponents of the reforms, however, claim they aim to create a fairer tax system, though the economic impact of this shift remains controversial.
