UK Faces Wealth Exodus Following Tax Reform

The United Kingdom experienced an unprecedented departure of wealthy individuals in 2024, with 10,800 millionaires leaving the country - equivalent to one departure every 45 minutes.

This marks a 157% increase from 2023, making the UK second only to China in wealth migration losses, according to the Independent.

Tax Reforms Triggering the Exodus

The Labour Party's budget overhaul and elimination of the non-dom tax regime has triggered significant changes. Chancellor Rachel Reeves' October Budget introduced multiple tax changes, including:

• Basic Rate Capital Gains Tax: Increased from 10% to 18%
• Higher Rate Increases: From 20% to 24%
• National Insurance: Rising to 15% on salaries above £5,000 starting April

At the CBI conference, she challenged critics to provide alternatives to address Labour's claimed £22 billion fiscal hole.

Impact on the Wealthiest Brackets

The exodus has particularly impacted the highest wealth brackets, with 78 centi-millionaires and 12 billionaires departing British shores in 2024.

Wealthy individuals are primarily relocating to the EU (particularly Italy, Malta, Switzerland, Portugal, and Cyprus), the United States, United Arab Emirates, and Australasia. The Caribbean Islands, Canada, and Singapore have also emerged as key destinations, while emerging markets like South Africa and Thailand gain popularity.

Key Statistics

• 42% of UK financial asset holders are seeking to transfer wealth to more tax-friendly jurisdictions
• Non-Doms' Contributions: £800,000 in VAT annually and £890,000 in stamp duty over five years
• Treasury Revenue: Projects £33.8 billion in revenue over five years from reforms

Economic Implications of the Wealth Departure

The economic implications are substantial. Under the previous system, 74,000 non-doms, including 37,800 long-term UK residents, paid £30,000 annually to shelter offshore income. Oxford Economics reports that surveyed non-doms invested an average of £118 million since arriving and donated £5.9 million to charitable causes.

The Adam Smith Institute projects the reforms will shrink the economy by £1.3 billion annually for the next decade and potentially eliminate over 23,000 jobs by 2030.