Are the rich leaving the UK due to high taxes? Where the wealthy are going

Record numbers of millionaires are fleeing Britain due to higher taxes and the end of non-dom status after Labour came to power last year.

Wealthy households had already been hit under the Tories by frozen tax thresholds as well as falling capital gains and dividend allowances, reducing how much they can keep from their income and investment gains.

Many were already looking to leave the UK for more tax-friendly shores even before the general election result, according to Henley & Partners, which advises wealthy individuals on investing for citizenship and residency.

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Now, these plans appear to have accelerated after Labour announced tax-raising measures affecting inheritance tax, private school fees, and employer national insurance contributions.

This has led to London seeing the sharpest wealth exodus of any major city in the world other than Moscow as thousands of millionaires flee the city, according to analysis by Henley & Partners.

The number of millionaires in London decreased by a staggering 12% over the last decade, meaning the total number of millionaires in the city fell from around 245,000 to 215,700.

In 2024 alone, 10,800 high-net worth individuals left the UK, the research shows.

The outflow was especially large at the top-end, with 78 centi-millionaires and 12 billionaires leaving the UK in 2024.

In terms of applications from UK nationals for alternative citizenship and residency, Henley & Partners said 2024 was a record-breaking year.

It saw a 57% increase in the number of applications from Brits versus the number who applied in 2023.

Why are the rich leaving the UK?

The UK tax burden is at record levels, making living in the country less appealing to those with lots of wealth.

Frozen tax thresholds have created fiscal drag, hitting people’s earnings.

People earning above £125,140, face a 45% income tax rate, while the personal allowance is reduced by £1 for every £2 you earn above £100,000.

Meanwhile, those who take income from dividends have seen the allowance cut from £1,000 to £500 since April 2024, while it was £5,000 when first introduced in 2016.

Capital gains allowances have also halved since April to £3,000.

These changes came in under Conservative governments.

Since Labour came to power, the government has enacted the Tory plans to scrap non-dom status, raised employers' National Insurance, and pushed capital gains tax up to 18% for basic rate taxpayers and to 24% for higher earners.

Landlords and second home buyers now also 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.

Labour also added VAT to private school fees – analysis suggests parents will need to find an extra £111,300 per child for a full course of private education.

Where are the rich relocating to?

While the UK’s tax take is at a record level, there are plenty of locations looking to attract wealthy individuals with so-called golden visas in return for investment in government projects as well as businesses or residential developments.

One of the most popular locations is the United Arab Emirates (UAE), including Dubai, according to Henley & Partners.

Residents benefit from zero income tax as well as a luxury lifestyle. The UAE is poised to welcome a record net inflow of 6,700 millionaires this year alone, including Brits.

The number of millionaires who call Dubai home has increased by 102% in the last decade, bringing the total number to 81,200. This includes 237 centimillionaires, and 20 billionaires.

The UAE lets people apply for its golden residence visa by either buying a property worth a minimum of AED 2 million (approximately $550,000) in cash or through a loan from specific local banks.

There is also an option to purchase property off-plan through approved real estate companies.

“The evolution and development of the UAE’s wealth management ecosystem is unprecedented,” says Sinita Singh-Dalal, partner leading the private wealth and family offices at Hourani.

“In less than five years, the UAE has introduced a robust regulatory framework that provides the wealthy with a range of innovative solutions to protect, preserve and enhance their wealth.”

Other top destinations for migrating millionaires include the USA, with Florida attracting expats, as well as Singapore, Canada and Australia.

The US has an immigrant investor programme where it provides residency to those who put $1,050,000 into a non-targeted employment area project or $800,000 into a targeted employment area project in a rural area or an area with high unemployment.

Alternatively, there is also a scheme for those who create or preserve 10 permanent full-time jobs for qualified USA workers.

Singapore has an investment for residency programme to back either a Singapore Economic Development Board fund, new companies or to establish a family office in the country.

You can get Canadian residency by setting up a business or raising money through an angel investment or a venture capital fund.

Meanwhile, rather than seeking investment, Australia welcomes prominent and internationally-recognised talent from certain sectors such as energy, defence, financial services and education.

“The countries with the greatest growth in high-net-worth individuals continue to be those who have prioritised policies designed to entice millionaires to their shores,” adds Volek.

“Nine of the Top 10 countries attracting the most millionaires in 2024 have formal investment migration programs and actively encourage foreign direct investment in return for residence or citizenship rights.”

One area that may become less attractive though is Spain.

Spain scrapped its golden visa in April and there are even suggestions that it could impose a 100% tax on non-EU property buyers.

Other European countries such as Cyprus, Italy, Malta and Portugal remain popular among expats and have ongoing golden visa schemes for those who invest certain sums.