Tax hikes push wealthy individuals to exit the UK – what are the risks of relocating?

Increasing numbers of wealthy individuals are exiting the UK in the aftermath of the Autumn Budget.

Chancellor Rachel Reeves unveiled £40 billion of tax rises in her first Autumn Budget in October.

This included maintaining freezes on income tax thresholds that were introduced by the previous Tory government, raising employer National Insurance and pushing capital gains tax up to 18% for basic rate taxpayers and to 24% for higher earners.

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Landlords and second home buyers now have to pay an extra 5% stamp duty, instead of 3%, while pensions will also form part of an estate for inheritance tax purposes from April 2027.

These extra costs are making wealthy households consider new shores.

A recent survey by tax adviser Cornerstone found higher taxes have prompted 21% of people to consider cutting ties with the UK, which it warns could result in “significant losses” amounting to billions of pounds in lost business and property revenue as well as investment assets.

"Our data highlights a clear issue that there are significant concerns amongst Brits regarding the new Labour government and the Autumn Budget,” says David Hannah, group chair of Cornerstone Tax.

“These are not just fleeting thoughts – they are serious intentions for many Brits as they seek more favourable conditions elsewhere.

“This situation has left many feeling trapped in a challenging market, prompting them to seek better alternatives overseas.”

This is echoed by other research.

Analysis by Currencies Direct found 39% more Brits are considering moving overseas due to the cost of living in the UK.

Meanwhile, Canaccord Wealth said it has seen a 56% rise in wealthy individuals considering moving their assets to lower tax regimes such as the Channel Islands and the Isle of Man.

Dariusz Karpowicz, director at Albion Financial Advice, said there has been a noticeable exodus of wealth and wealth creators since the Autumn Budget.

“Our phones have been ringing off the hook as clients seek greener – and considerably less taxed – pastures,” he says.

"While the Treasury might view this as a necessary medicine for public finances, many of our high-net-worth clients are voting with their feet, treating relocation as their own form of fiscal policy. The fact that our current tax burden exceeds post-war levels seems to be the final nudge many needed to start exploring their options abroad."

Where are wealthy Brits relocating to?

Migration consultancy firm Henley & Partners warned of record numbers of millionaires exiting the UK even under the Tory government before the general election due to frozen tax thresholds and falling capital gains and dividend allowances.

The United Arab Emirates, Singapore and the USA were its most popular locations.

Destinations with no income tax such as Dubai or where rates are low like Singapore are popular.

Karpowicz says Portugal's 'golden visa' programme – which provides residency to non-EU citizens who transfer a minimum of 1.5 million to the country – is also attracting significant interest from those preferring to remain closer to home.

“The timing is particularly telling, as this isn't just the usual end-of-year planning: it's a direct response to the UK's tax burden reaching historic highs,” he says.

David Robinson, co-founder at Wildcat Law said he has seen an increase in pensioners retiring abroad.

He says: “For those wishing to stay close to the UK, Ireland continues to be an attractive destination. Ready access to the UK, combined with English speaking, appeals to many. For those happy to uproot and move further afield the Caribbean is particularly attractive.

“There are a range of options available with tax regimes to suit most wealthy individuals. We have seen an increase in middle Britain pensioners moving to Greece following the Budget. A very attractive tax regime for British pensioners, combined with a lower cost of living and better climate, is proving a big draw given the removal of winter fuel allowances."

The risks of relocating

It isn’t necessarily as easy as just packing your bags and leaving to escape the UK’s tax system.

There may be a new language and cultural issues to navigate.

You can still be taxed on income you earn in the UK such as from a rental property if you are a non-resident so you may still need to sell-up and pay the higher CGT rates if you want to move.

Pension withdrawals may also be subject to UK tax unless there is a double taxation treaty with the country you have moved to.

It may also affect your savings as you can hold onto ISAs if you give up your UK residency but you won’t be able to make further contributions.

Even inheritance tax can still be charged on your estate for up to 10 years after you leave the UK, if you had lived in the UK for 10 years prior to that point.

The amount of time you spend in the UK can also be a factor as if you return for more than 90 days in a full tax year, HMRC may still want to tax you.

You may also find that your state pension doesn’t get increased by the triple lock if you move to certain countries to retire abroad.

Despite the risks, analysis by Henley & Partners suggests that the UK is expected to see an unprecedented net loss of 9,500 millionaires in 2024 – second only to China worldwide and more than double the 4,200 who left the country last year.

“2024 is shaping up to be a watershed moment in the global migration of wealth,” says Dominic Volek, group head of private clients at Henley & Partners.

“In many respects, this great millionaire migration is a leading indicator, signalling a profound shift in the global landscape and the tectonic plates of wealth and power, with far-reaching implications for the future trajectory of the nations they leave behind or those which they make their new home.”