Surge in rich planning to leave UK amid tax concerns: Report

Wealth managers report that proposed changes to tax laws in the upcoming autumn budget are driving the demand.

• EasternEye
• 07 September, 2024

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By: EasternEye

THE NUMBER of wealthy Britons seeking to move abroad has surged since the Labour Party’s election win, with concerns growing over potential tax hikes targeting high earners.

According to The Times, a company specialising in relocation services for high net-worth individuals saw a 69 per cent increase in inquiries in August compared to the same period last year.

Wealth managers report that proposed changes to tax laws in the upcoming autumn budget are driving the demand, particularly the plan to make non-domiciled (non-dom) residents’ global wealth subject to UK inheritance tax.

Keir Starmer has said that tax increases are inevitable, adding that “those with the broadest shoulders should bear the heavier burden.”

This uncertainty is also affecting the high-end property market, with transactions slowing as wealthy buyers hold off on committing to properties in the UK. Reports suggest that the government may introduce higher capital gains tax (CGT) and reduce pension tax relief for top earners.

Chris Etherington, a tax partner at RSM, told The Times that his firm has seen a notable rise in inquiries from wealthy individuals. He said that many are reconsidering whether the UK remains the right place for them to live. Kim Klahn, a corporate tax partner at Clarke Willmott, echoed this sentiment, saying that clients are rushing to sell or transfer assets before potential changes to CGT take effect.

Henley & Partners, a firm that assists wealthy individuals in relocating overseas, estimates that the UK could lose 9,500 millionaires by the end of this year — more than any country except China. Dubai, Switzerland, Portugal, Italy, and Cyprus are popular destinations for those looking to move abroad, the newspaper reported.

Stuart Wakeling, the director of Henley & Partners’ London office, said that while many are pleased with the new government, there has been an increase in individuals seeking a “Plan B.” He explained that tax concerns are a major factor driving this trend, alongside worries about crime and terrorism.

There are predictions that the proposed changes could result in up to 25,000 non-doms leaving the UK over the next five years, potentially leading to a loss of £900 million annually for the Treasury, The Times reported.

Furthermore, tax experts warn that a significant increase in CGT, possibly aligning rates with income tax, could also reduce Treasury revenues.