London has historically served as a global magnet for high-net-worth individuals (HNWIs), prized for its stable economy, premier financial services, and elevated lifestyle. Yet, a growing number of wealthy individuals are now choosing to leave the UK, driven by a mix of unfavourable tax changes, economic uncertainty, and evolving global mobility trends.
This emerging pattern prompts critical questions: Why are millionaires leaving? Where are they going? And what implications does this shift have for the UK’s economy and public finances?
Why Are Millionaires Leaving London?
1. Rising Tax Burdens
Recent fiscal policy changes have made the UK a less attractive environment for wealth preservation:
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Increased Income Tax Rates: The top marginal rate of 45% now applies to income exceeding £125,140.
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Reduced Dividend Allowances: Tax-free dividend income has dropped sharply—from £5,000 in 2017 to just £500 by 2024.
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Capital Gains Tax (CGT) Reforms: The CGT allowance has been halved, and effective tax rates remain high relative to international peers.
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Inheritance Tax (IHT) Pressures: With a 40% tax rate and frozen thresholds, more estates are falling within the IHT net.
These rising tax burdens are encouraging many HNWIs to explore more favourable jurisdictions for managing and passing on wealth.
2. Economic Uncertainty and Declining Competitiveness
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Post-Brexit Trade Barriers: The UK’s departure from the EU has reduced market access and introduced new regulatory complexities for businesses.
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Sluggish Economic Growth and Inflation: Persistent economic instability diminishes real wealth and confidence in the UK’s long-term outlook.
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Luxury Property Market Stagnation: A cooling in London’s prime real estate sector has dampened the capital appreciation prospects that once drew global investors.
3. Evolving Lifestyle and Mobility Trends
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Abolition of Non-Dom Tax Benefits: The phasing out of the non-domiciled tax regime has significantly impacted the appeal of the UK for internationally mobile wealth holders.
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Attractive Alternatives Abroad: Countries offering tax incentives, greater financial privacy, and a higher quality of life are becoming more appealing destinations for affluent individuals.
Where Are London’s Millionaires Relocating?
Several global locations are emerging as preferred havens for departing UK millionaires:
1. United Arab Emirates (Dubai & Abu Dhabi)
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No income or capital gains tax
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Long-term Golden Visa residency schemes
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Dynamic, entrepreneur-friendly economy
2. Switzerland (Zurich & Geneva)
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Low and predictable wealth taxation
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Strong political and economic stability
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World-renowned lifestyle and banking privacy
3. Monaco
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No personal income or capital gains tax
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Ultra-luxurious living and a secure environment
4. Singapore
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Pro-business regulations and robust financial markets
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Competitive tax regime tailored for expatriates
5. Portugal & Italy
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Tax-efficient Non-Habitual Resident (NHR) programs (Portugal’s now being phased out)
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Golden Visa programs incentivizing property investment
The Economic Impact on the UK
The growing exodus of HNWIs could have serious repercussions:
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Reduced Tax Revenue: A small percentage of top earners contribute a significant share of income tax, CGT, and IHT. Their departure could exacerbate the fiscal deficit.
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Decline in Domestic Investment: Many departing millionaires are also entrepreneurs and investors, relocating both their capital and business activity abroad.
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Pressure on the Luxury Real Estate Market: Demand for high-end London properties is softening, further impacting economic activity and tax collection in this sector.
What Can the UK Do to Retain Wealth?
To remain competitive in a globalised wealth landscape, the UK should consider the following measures:
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Reassess Non-Dom Tax Policy: Reintroducing targeted incentives could help attract and retain internationally mobile wealth.
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Reform CGT and IHT Structures: Reducing tax rates and increasing thresholds would align the UK more closely with rival jurisdictions.
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Enhance the Post-Brexit Business Environment: Simplifying regulations and encouraging inward investment will be key to retaining global capital.