Record numbers of millionaires are already fleeing the UK amid rising taxes under the Labour government. We reveal the top destinations for migrating millionaires.
Moneyweek 20/01/25
Record numbers of millionaires have fled Britain since Labour came to power due to high taxes and the impending end of non-dom status.
Wealthy UK households had already been hit under the Tories by frozen tax thresholds as well as falling capital gains and dividend allowances, hitting 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.
These plans appear to have been accelerated after chancellor Rachel Reeves used her first Budget to unveil £40 billion of tax rises.
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 millionaires 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
That was just under a Tory government.
Since Labour came to power, the government has carried on with 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 is also adding VAT to private school fees, which will hit wealthy households.
Where are the rich relocating to?
While the UK’s tax take may be on the rise, 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 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 5 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 is scrapping its golden visa in April and there are even suggestions that it could impose a 100% tax on non-EU property buyers.
But 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.
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