The report comes from this week’s CNBC UK Exchange Newsletter. Every Wednesday, Ian King brings you expert insights on the most important business stories in the UK, as well as the main characters who shape the news. The newsletter will also highlight other key developments you don’t want to miss and preview the basic events that will cause the wave. Like what you saw? You can subscribe here.
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For much of this century, Britain, and especially London – has been one of the most popular destinations for life, work and play in the world.
The labor governments of Tony Blair and Gordon Brown and Peter Mandelson, now the senior minister of the British ambassador to the United States, best summed up the UK’s approach during this period. In 1998, he told a group of Silicon Valley business leaders: “As long as they pay taxes, we feel wealthy and we feel very relaxed.”
But this is changing now as the rich flee the punitive new tax system, which has serious consequences for the country.
It can be argued that this began with Russia’s invasion of Ukraine in 2022, while hundreds of Russian oligarchs left the UK after being approved. This makes sense in itself. Upscale real estate agent Aston Chase estimates that at the time of the invasion, about 150,000 Russians lived in Londongrad, with a £1.1 billion ($1.5 billion) residential property.
But it is a specific Russian issue, and few mourn their departure except those who profit from Russian activities.
Things began to change even more during last year’s general election, when then Treasury Prime Minister Jeremy Hunt tried to steal his labor rival’s clothes in the March 2024 budget.
He announced that as of April 2025, the UK will Abolish the so-called “non-dom” identity – The quirks of the tax system dating back to 1799, which made wealthy people living in the UK not consider this to be their permanent residence or “home” and could only pay British taxes based on income or income transferred to the country.
This is a flagship labor policy, labor was made from hay from former Prime Minister Rishi Sunak’s Indian-born wife Akshata Murty, who is former Prime Minister and one of about 74,000 people who enjoy non-DOM status in 2022-23 (the latest tax year is available).
Hunter claims to replace his “simple, residency-based system” with his non-DOM identity and will raise £2.7 billion a year. It is crucial, however, that he chose not to place overseas assets under the UK estate tax on non-DOMS.
When Labor won the election, in July last year, newly appointed Prime Minister Rachel Reeves decided she needed to maintain the party’s leadership on the issue. So she Abolished exemption On Offshore Trusts – it is possible to expose these people’s global global wealth to a 40% tax.
Overnight, it transformed Britain from one of the most attractive destinations in the world to one of the most expensive places in the world.
The result has always been the emergence of super rich people.
The rich exodus
It’s hard to know exactly how many people are left. New World Wealth and Investment Immigration Advisor Henley & Partners, analytics firm, suggested in March this year that the UK lost 108 million net immigration in 2024 and 157% in 2023, 157% higher than any other country outside China.
Some have disputed the numbers, including legal counsel, Stephen Kinsella, a member of patriotic millionaire Britain, a nonpartisan network of British millionaires that demands a wealth tax. He recently told me that the numbers are based on inferences on LinkedIn that the number of people on LinkedIn said they left.
He added: “There are about 3 million people in the UK, and even if 10,000 million left, it is about 0.3% of millionaires.”
Henley & Partners and New World Wealth published a new report last week predicting 165 million people will leave the UK this year, more than double what many expected, the highest net outflow from high-net-worth individuals from any country since they began tracking millionaires immigration 10 years ago.
Street scene of Old Bond Street in Mayfair, London, England.
Pawel Libera | Image Gallery | Getty Images
Although the actual numbers will not be known until a few years after the UK tax authorities criticize the numbers, there are many straws in the wind. Lonres, tracks activities in London’s main real estate markets, estimate In May this year, transactions involving such homes were 36% less than the same period last year. At the same time, the company has data suggestion Last year, more than 4,400 directors left the UK, and departures have accelerated in recent months.
Among those who left were some very striking, including South African-born Goldman Sachs vice-president Richard Gnodde; Egypt’s wealthiest, co-owner of Aston Villa Football Club co-owner Nassef Sawiris and Norwegian-born transport giant John Fredriksen. Lakshmi Mittal is said to be often ranked among the richest in the UK, and is said to be weighing his options and is generally expected to waive his UK tax residency.
More complicated is that other countries are currently welcoming the rich with open arms. They include gnodde relocated Italy, which allows wealthy foreigners to pay Annual fee up to 200,000 euros Exempt taxes on overseas assets and income. But the highest destination for migrating millionaires is the United Arab Emirates, now home to Saveris and Frederickson. The latest Henley & Partners/New World Wealth report predicts that it will attract 98 million net people this year.
None of these appeared in the UK’s fiscal forecasts. Indeed, the independent office of budget responsibility still assumes that Reeves’ move will increase by £2.7 billion per year in 2028-29. It assumes that 12%-25% of non-DOM will be ignored.
Consulting firm Oxford Economics published last September based on a survey of non-DOMS and its consultants, 63% of people will leave within two years of implementing the measures. In addition to the survey, Oxford Economics expects that in this case, Oxford Economics will expect 32% of non-DOMS to leave, instead of 8.9 billion pounds of taxes paid in 2022-23, the policy will start to cost treasury funds.
These people will pay more than just the pre-determined taxes, which will be hurt. Thousands of jobs in areas such as retail, hotels, legal services and luxury goods depend on the ongoing presence of the former non-DOMS UK. Dozens of charities, culture and sports organizations depend on their sponsorship and charity. Therefore, it is not just the impact of the Ministry of Finance.
What was late is that the government realized that there was something wrong with this. Unfortunately, it may be too late to lure those non-DOMs away from the non-bonds that have disappeared with others because of changes in VAT on school fees and agricultural property relief and commercial property relief that expose previously tax-free estates and businesses to first estate tax.
However, the government can still take action to prevent further departures. The most effective thing to do is to restore exemptions from inheritance tax granted to offshore trusts. For Reeves, this would be problematic because taxes on the wealthy are popular among labor voters, even as suggested by a poll last weekend, can hurt public finances.
But the Prime Minister needs to find some way to backup without looking like a turnaround. And, as many wealthy people want to move in time until the start of the new school year in September, she may have to wait until the fall budget to leave.
– Ian King
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On the market
UK FTSE 100 It has returned to its pace of progress over the past week, up about 0.3%, but up to 1.2% from June’s record.
If you missed the UK vehicle manufacturing Sharp decline for five consecutive months May is a headwind, including the U.S. President Donald TrumpThe trade policy has severely hit the automotive industry.
In addition, the thieves are trying their best to ensure fewer cars on the roads in the UK Stealed and shipped from the UK within 24 hours.
The Financial Times Stock Exchange 100 index has performed over the past year.
