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UK government plans to end the beneficial tax treatment of riches overseas is causing millionaires to look elsewhere

Guillaume Rambourg was an ambitious graduate when he left his native France in 1994 to live in London in pursuit of a career in finance.

Three decades later, and — although Rambourg has retired from working in financial services and moved abroad for a period — he once again lives in London with his family.

“I feel very good living here in London, it’s a melting pot, people come from many different countries — it’s a multicultural city,” says Rambourg, now 53. “Five of my children were educated in London, most of my friends are here. We complain about the weather, but the city has so many attractive things to offer.”

Rambourg is one of the 74,000 people in the UK who claim “non-domiciled” tax status: residents whose permanent home is overseas for tax purposes. As such, non-doms pay UK tax only on money that they earn in the UK, and their overseas money is tax-free for up to 15 years, as long as it is not remitted back into the country.

For years, this regime has allowed individuals to reap the benefits of a lower tax bill. It can be traced back to 1799, when it was introduced to protect those with foreign property from the UK’s new wartime taxes.

However, the regime was kept in place after that time, and has continued to allow residents to cite another country as their tax domicile. UK non-doms are thought to have at least £10.9bn in offshore income and gains that is free from tax in the UK, according to a research paper by Warwick University and LSE.

But, from next April, this whole regime is set to be abolished — marking one of the biggest ever tax upheavals for the ultra-wealthy in Britain. The chancellor, Rachel Reeves, is expected to announce further details in her autumn budget.

As a result, some non-doms have left the country, and others are considering doing so. “A lot of people I know are using this as an excuse or reason to leave the UK,” reports Rambourg. “Some have already left.”

Rambourg is not deterred by the non-dom regime change, though. “It’s not going to be a reason for me to leave the UK — this is where my children live, my family, my friends, my business,” he argues.

Ending non-dom status was first proposed by the UK’s former Conservative government, but will be enacted under the manifesto proposals of the newly elected Labour government and take effect next year. Labour has said the changes it introduces will make the tax system fairer and raise revenue to improve state education and the NHS.

Under the current rules, the regime grants non-doms, who have been UK residents for less than 15 years, full tax relief on income and gains earned and kept overseas. This regime costs nothing for the first seven years before an annual fee kicks in. After 15 years, assets become subject to the three main UK taxes — income, capital gains and inheritance — unless the money is placed in a trust before this time. Removing non-dom status could raise £2.7bn a year by 2028-2029, according to figures put forward by the outgoing Conservative chancellor Jeremy Hunt.

To Nimesh Shah, chief executive of accountancy firm Blick Rothenberg, it represents a historic change. “We’ve had the non-dom regime in pretty much the same form since the 1800s,” he says. “It’s been around a long time. If you earn money abroad and leave it there, you’re not taxed on it. But that old-world regime where you get tax relief on overseas earnings is going.”

Some financial services professionals expressed shock when the changes were put forward by the former Conservative government, as it was the then opposition Labour party that had first proposed abolishing non-dom status.

“To our real surprise, the Conservatives decided to substantially dismantle [the non-dom regime],” says David Denton, a technical specialist at wealth manager Quilter Cheviot. “That started the rumours that lots of non-doms would leave. I know a few wealthy non-doms with property overseas who have said, ‘Enough is enough, I’m going.’”

Under the proposed overhaul of the regime, people arriving in the UK would be allowed tax relief on their foreign earnings for the first four years of residence, before they become liable to UK income and capital gains taxes.

And, in a further blow to wealthy non-doms, the Labour government has said trusts will no longer offer permanent protection from UK inheritance tax, which is levied at 40 per cent.

“Trusts have been around for centuries; many non-doms have them,” points out Shah at Blick Rothenberg. “So this will be a big cliff edge.”

Nick Ritchie, senior director of wealth planning at RBC Wealth Management, says the lack of protection from inheritance tax has made the non-dom regime overhaul “a bit more shocking”.

Some of his clients have already decided to leave the UK as a consequence, although he notes these have been the ultra-wealthy who “don’t have as many ties to the UK, have multiple properties and are able to change at short notice”.

The bulk of Ritchie’s clients, however, are still in a holding pattern. Part of the problem for non-doms is that the full details of the new regime change have yet to be announced. Although the budget could provide more clarity, the government has not said whether this will result in draft legislation.

“They recognise these changes will be drastic in terms of how they will be taxed on their global asset base but, in the absence of specific policy, they’re more scenario planning,” says Ritchie of his concerned clients.

Stuart Adam, a senior economist at the Institute for Fiscal Studies, explains that the government has to manage a delicate balancing act between “not taxing people so much that they leave — or don’t come to — the UK, taking their tax payments with them . . . and getting more revenue from those who do stay”.

He suggests much of the policy debate has been around whether Labour’s plans “push the balance too far in one direction and risk an exodus, or the next generation not coming”. There are also issues of fairness at stake, such as whether UK inheritance tax should be levied on people who build up their wealth abroad and then die in the UK.

Adam also believes that there are “oddities” in the new approach. For example, allowing people in their first four years to live in the UK free of tax on foreign assets, but not free of tax on their UK wealth, could discourage them from bring money in and investing in the UK.

The four-year timeframe could also mean that non-doms stay in the UK only for a short period of time, to the detriment of economic activity. “At the moment, [the regime] encourages people to stay for 15 years,” says Shah at Blick Rothenberg, “but four years could make the UK more transient.”

He warns that such a regime could deter people from settling. “I think this would cost the economy a lot more because of the wealth, investment and businesses not coming here,” he explains. “Four years is too short, and the IHT cliff edge is a deterrent as the rate, at 40 per cent, is so high.”

Ritchie at RBC says that, while certain non-doms are likely to stay, such as those with a family and children in schools, there is a cohort of tech entrepreneurs that “Labour needs to be thoughtful about”. He believes the government needs to be encouraging “these people to come in, people who create jobs and wealth”.

For those who have already decided to leave, a number of countries across Europe and the Middle East are emerging as popular destinations. Ritchie cites Italy, Switzerland, France, Portugal and the UAE. “It’s countries that cater for safety and security, climate, lifestyle and tax,” he says. “If you get it right, you can prove attractive to high-net-worth individuals.”

Nevertheless, even some of these jurisdictions have recently tightened their tax regimes. Italy, for example, decided to double the annual flat tax on the foreign income of new residents to €200,000 in August. Portugal, meanwhile, closed its non-residents programme last year and launched a new system that is no longer available to individuals deriving an income from pensions.

Philippe Amarante, head of Middle East at Henley & Partners, a residence and citizenship advisory firm, says that “Dubai is really shooting the lights out” in attracting non-doms. He notes that this is largely because of its “attractive” tax regime, whereby individuals do not incur income or capital gains taxes, as well as the lifestyle and the “pro-business sentiment”.

In all, these UK non-dom departures could contribute to an “unprecedented” net loss of 9,500 millionaires from Britain this year, according to Henley & Partners — more than double the number who left the country last year and second only to the number leaving China. Part of this overall exodus can been ascribed to “unwelcome policy decisions”, such as the ending of the non-dom tax regime, calculates Dr Hannah White, chief executive of the Institute for Government think-tank.

Rambourg makes clear that he will not be among the millionaires fleeing Britain this year — but he has left the door open for a future exit. “I’m still a French national and, maybe, I will eventually go back,” he muses.

“But I think it’s a duty to pay tax — I don’t choose the country I’m going to live in just because of the tax set-up. There are real non-doms out there, who are not obsessed by tax, and who plan to remain in the UK in spite of the disappearance of a tax perk.”

In busier years for tech IPOs, the week after Labor Day is a brisk period for roadshows by companies looking to make an autumn market debut.

This year, however, isn’t playing out that way. None of the hot venture-backed tech companies seen as likely IPO prospects filed to go public in August. And while there’s still time to file and go public before the end of the year, there’s little indication of an appetite to do so.

“There will be no major pickup,” said Lise Buyer, partner at Class V Group, an IPO adviser. While it’s possible we’ll see some tech IPOs, she doesn’t expect to see a significant upturn in activity until the latter half of 2025 or even 2026 at the earliest.

Slower growth holding back new offerings

The forecast for a sluggish finish to the year follows several unusually boring quarters for the tech IPO market.

True, a few companies, including Astera Labs and Reddit, made well-received debuts this spring. A number of biotechs also carried out IPOs. But most weeks, the market has been uncharacteristically quiet. The postponement of Chinese autonomous vehicle startup WeRide’s U.S. IPO last month added further to the sense of inactivity.

The dullness is noteworthy because by many metrics, it doesn’t seem like an especially terrible time to go public. The tech-heavy Nasdaq Composite Index is up 31% in the past 12 months. Large caps like Nvidia, Meta and Apple are riding high. And the handful of tech companies that did go out haven’t performed badly.

Buyer, however, believes debut plans are getting delayed largely because many pre-IPO companies, particularly in enterprise software, are growing at slower rates than was typical during the bull market.

A few years ago, Buyer recalls, it wasn’t uncommon to see hot enterprise software companies growing revenue at 40% to 50% annually. These days, even top performers are likely to post annual revenue gains in the 20% to 30% range.

Valuation reset mostly complete

Buyer sees valuation concerns as a less pertinent factor holding back IPOs. Following the market downturn, scores of one-time unicorns had to take a valuation haircut. By this point, however, that process is mostly complete, even if not everyone is happy about it.

“Some management teams still think it’s temporary and still think valuations will go back up,” Buyer said. “But valuations won’t reach that level again unless growth reaches that level again.”

For now, even the hottest venture-backed companies are mostly holding off on market debuts. This is partly due to a “you go first” mentality, and partly to see if they can achieve higher growth rates and revenue, and thus secure a higher market cap down the road.

All told, the wait-and-see attitude made for a very sluggish August, which is often a much buzzier period for IPO filings. (In recent years, for instance, Snowflake, Palantir and Toast all filed in August.) There’s little indication September will be much busier, and companies will likely want to avoid making a debut right around the Nov. 5 presidential election.

Thus, it looks like those of us waiting for IPO action to pick up will have to set our sights on next year.

Plan for world’s largest low-emission plant of its kind in limbo over push for US subsidies

The crown prince of Abu Dhabi has thrown his weight behind a huge but uncertain hydrogen project in Texas, offering to buy 35 per cent of ExxonMobil’s plant in Baytown, Houston. 

Sheikh Khaled bin Mohammed bin Zayed al-Nahyan, the son of the ruler of the United Arab Emirates, took part in the signing of a “multibillion-dollar” deal on Wednesday between Adnoc, Abu Dhabi’s state oil company, and Exxon.

Michele Fiorentino, executive vice-president of Adnoc’s low-carbon solutions, said the Baytown project was both “the largest, and most importantly, one of the most cost-competitive” attempts to make hydrogen without releasing large quantities of carbon dioxide. He said Adnoc’s investment was “very material, easily at the multibillion-dollar scale”.

He suggested that Adnoc would also invest further “if the market develops faster and bigger than we planned” to expand the plant with additional capacity.

Adnoc’s interest in Baytown may help unlock a project that has been left in limbo over how much US government support it will receive, with added uncertainty because of the presidential election in November.

“How certain is the political landscape in the US? We will push on with the project on the assumption that everything will be good and well by [the time we take our] final investment decision,” said Fiorentino, adding that the US and UAE signed an agreement in December 2023 to co-operate on clean energy.

The deal will be a boost to the Baytown project, which will be the largest low-carbon hydrogen plant in the world if it goes ahead. The plant aims to produce 1bn cubic feet (bcf) a day of “blue” hydrogen, which is made from gas but with technology to capture the resulting carbon emissions. 

Before the Adnoc deal, the future of the project had been in doubt. Last December, the US Treasury issued draft guidelines for how it would allocate tax breaks to hydrogen plants, which did not mention blue hydrogen facilities such as Baytown. 

In March, Exxon’s chief executive Darren Woods then threatened to drop the project if it did not qualify for government incentives. 

A statement from Exxon said the deal with Abu Dhabi was “contingent on supportive government policy and necessary regulatory permits” and that a final investment decision on the project would be made next year, with production planned for 2029. 

“We appreciate His Highness Sheikh Khaled bin Mohammed bin Zayed al-Nahyan’s support for this groundbreaking partnership,” said Woods.

A lack of clarity over which projects will qualify for lucrative tax incentives available under President Joe Biden’s Inflation Reduction Act has already caused project delays. Nel Hydrogen, an electrolyser manufacturer, recently paused its $400mn factory project in Michigan over this uncertainty.

By 2030, the US is expected to become the world’s largest hydrogen producer, with blue hydrogen generated by gas, composed mainly of methane, making up more than three-quarters of production, according to consultancy BloombergNEF. Green hydrogen, generated by renewable electricity, will make up the remaining amount.

But analysts say hydrogen projects face a struggle to secure funding and customers, with BNEF estimating that only 6 per cent of US projects have secured binding supply agreements. 

Fiorentino said the Baytown plant would supply Japan and Korea with ammonia to burn in its power sector and hydrogen to refineries in Europe.

Good news for Microsoft: The U.K.’s antitrust regulator says that the tech titan’s high-profile acquihire of the team behind AI startup Inflection doesn’t cause competition concerns, and thus it won’t be pursuing a full-scale investigation.

However, the Competition and Markets Authority (CMA) says that the deal — reportedly valued at around $650 million — does fall under its regulatory purview as a “relevant merger situation,” meaning similar deals in the future may still be investigated on competition grounds — even if a full acquisition has not taken place.

The ‘quasi-merger’

Microsoft launched a new consumer AI division back in March, which Inflection co-founders Mustafa Suleyman and Karén Simonyan (respectively, also previously a co-founder and scientist at Google DeepMind) are spearheading. CEO Satya Nadella confirmed that a number of other Inflection AI members had joined Microsoft’s new AI unit, such as AI scientist Jordan Hoffmann who is now heading up Microsoft’s U.K. AI hub in London.

Back in July, CMA revealed that it was launching a “phase 1” merger inquiry into the deal, kickstarting an investigation to gather evidence and decide whether to proceed with a full probe. Central to the initial phase was whether the deal could in fact be investigated as a “merger,” given that Microsoft hadn’t actually acquired Inflection AI. And if it did qualify as a merger, whether further action is required to counter competition concerns.

At the heart of all this is a growing push by big tech companies to circumvent regulatory scrutiny around AI, powered by a new M&A approach that some have dubbed the “quasi-merger” — this could involve anything from strategic investments, to — as we’ve seen with Microsoft and Inflection — hiring startup founders and technical talent.

In its findings, the CMA notes that Microsoft hired “almost all of Inflection’s team” including two of its founders, while simultaneously entering into a series of commercial agreements such as a non-exclusive licensing deal to use Inflection’s intellectual property (IP). (The exact number was never specified, but reportedly it was around 70 others.)

Moreover, the CMA concluded that prior to their hiring, the Inflection team’s self-proclaimed remit was “creating AI for everyone,” but with the lion’s share of the team leaving Inflection, Microsoft had “acquired the team’s collective know-how” to develop its own AI smarts. The CMA writes in its assessment:

“Given that any technology in this space can quickly become obsolete without ongoing development, the CMA notes the importance of expertise to the development and supply of FMs [foundation models] and chatbots,” it said. “Based on the evidence seen by the CMA, the team of staff responsible for development is therefore at the core of any business seeking to develop FMs or chatbots. In this context, the CMA considers that acquiring a team with relevant know-how – even without further assets – may fall within the CMA’s merger control jurisdiction.”

One of the core criteria used in this judgement stems from the U.K.’s Enterprise Act 2002, which helps define what a “relevant merger situation” actually means. This includes whether, as a result of a transaction, “two or more enterprises cease to be distinct.”

Although Inflection still exists as a standalone business, the heart and brains of the company now lie at Microsoft. And this “value” that Microsoft procured cost it a fairly chunky $650 million, according to a report in The Information from March, a fee it’s paying Inflection substantively to license Inflection’s foundation models and make them available on Microsoft’s Azure cloud.

So it’s easy to see why some might view this arrangement as an acquisition in all but name.

“The transfer of employees, coupled with other tactical arrangements, mean that two enterprises are no longer distinct,” Joel Bamford, the CMA’s executive director, wrote in a LinkedIn post today.

Despite all this, the second facet of the CMA investigation concluded that the transaction didn’t pose any significant competition concerns, owing to the fact that Inflection was not a significant enough competitor to Microsoft’s existing AI tools.

“Inflection AI is not a strong competitor to the consumer chatbots that Microsoft has developed directly (Copilot) and in partnership with OpenAI (ChatGPT),” Bamford wrote. “On this basis, we cleared the transaction.”

Regulatory oversight

The original Microsoft-Inflection probe constituted one of several similar enquiries announced by the CMA back in April. This included Microsoft’s investment in French startup Mistral AI, with the regulator swiftly concluding that the deal didn’t qualify for investigation under current merger regulations due to the size of the investment. At the same time, the CMA revealed it was looking at Amazon’s ties with Anthropic in the wake of its $4 billion investment into the AI startup — this is now the subject of a formal probe.

Elsewhere, the CMA is also inviting interested parties and stakeholders to comment on Google’s ties with Anthropic, after the internet giant invested a reported $300 million last year followed by a further $2 billion.

So the main takeaway from all this is that Microsoft may have escaped regulatory intervention on this occasion, but future deals involving big tech and smaller startups are very much on the CMA’s radar — regardless of whether a full acquisition has taken place or not.

Situated at 747 Madison Avenue, the opening begins a new chapter between the Kering-owned French jeweler and the States — a relationship that dates back to its founding in 1858 by Frédéric Boucheron, who crafted pieces for some of America’s Gilded Age elites.

“The market has been waiting for us,” Boucheron chief executive officer Hélène Poulit-Duquesne said of the U.S.

The brand in the past operated stores in Hawaii and San Francisco, but both closed before Poulit-Duquesne came on as CEO in 2015, leaving Boucheron without stand-alone stores in America and retailing solely through retail partners Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman.

When Poulit-Duquesne joined, she focused on Asia-Pacific first. “We had to make choices. It would have been difficult for the size of the company to really succeed in both parts of the world. Now China and Korea are big markets, and we can reinvest in the U.S.,” she said, laying out a strategy that will see multiple boutiques and activations over the next two years.

“You have to push for a long time and be very patient to enter the U.S.,” she said, adding that America “needs a lot of investment to do it right.”

Boucheron, Poulit-Duquesne reported, is a more “mature” company now. “We are ready.”

The 3,900-square-foot boutique serves as “a bridge between Paris and New York” and is linked to Boucheron’s 26 Place Vendôme flagship in Paris, which was renovated in 2018.

“At the time[ in 2018] the big brands were pushing a concept, which is the opposite of what I wanted,” the CEO said.

Instead, she selected Pierre-Yves Rochon, the interior decorator behind some of the world’s top luxury hotels, to bring a fresh eye and a “family spirit.” The aim was to create a warm and accommodating space using history, custom-made furniture, and contemporary artwork as a means to share the legacy of Boucheron’s creations. Each boutique is different, she stressed, but the family spirit idea remains.

“What I hate is when you’re in New York, Dubai, or Tokyo, and you don’t remember which boutique you were in, because they’re all identical,” she said of the general concept of other jewelers’ stores.

The brand’s New York identity is set through the lens of Art Deco, a style Boucheron “is very strong in” and something many iconic buildings in New York are “known for.” The journey starts with the facade, built entirely of glass and metal. “It really belongs to our patrimony,” she said of the emerald cut design, the shape of Place Vendôme as seen from above, a “symbol” found in every boutique globally.

As customers experience the space the relationship between the two cities unfurls through the language of Art Deco meets modernity. The traditional windows and steles are embellished with black lacquered wood and pronounced geometric contours, while the Art Deco-style furnishings throughout the space cement the theme further. Collections are displayed alongside objets d’art, like alabaster lamps by designer Pierre Chareau. A wall of straw marquetry — an artistic craft that dates back to the 17th century — accents a central window, here a creation by the French artist Olga Thune-Larsen, the fifth time that Boucheron has collaborated with the artist in its boutiques.

Along with importing French craftsmanship to New York, the space brings several elements from its Place Vendôme boutique in reinterpreted form. Chandeliers, made by Maison Delisle, create a cascade of light, and the green-lacquered wooden chest of drawers dominating the entrance of the Paris boutique has been reproduced for New York, this time in the shape of an emerald cut.

As guests descend a small set of stairs to a seating selling area, they are greeted with whimsical wallpaper from Atelier d’Offard composed of numerous Boucheron advertising campaigns from the past — a nod, the brand says, to the rampant fly-posting typical of New York and Paris streets.

Founder Frédéric Boucheron was one of few French jewelers who attracted American society early on, counting the Astors and Vanderbilts as clients. During Hollywood’s golden age, Greta Garbo, Rita Hayworth and Marlene Dietrich wore the brand. The appeal to Hollywood remains true today — the 2023 Oscars red carpet saw Charlize Theron don never-before-seen diamonds from the French house’s Quatre collection, currently celebrating its 20th anniversary.

The Manhattan boutique pays homage to these many iconic moments with pieces from the private collection on display, including an Art Nouveau butterfly brooch that Elizabeth Taylor wore to the 1976 Oscars. Underscoring the maison’s savior-faire through patrimony, three reproductions of archive pieces will shine in the Madison boutique — an aigrette that Cornelius Vanderbilt bought for his daughter Gertrude; a necklace made to order for Marie-Louise Mackay in 1899, and a bow brooch commissioned by Caroline Astor’s husband, also in 1899 — all to show “the link and history between Boucheron and U.S.,” the CEO said.

Last year the Kering-owned jeweler acquired a Paris-based specialist workshop that includes more than 60 artisans, reinforcing its high jewelry capabilities, a category Poulit-Duquesne is sure will resonate with a newfound American customer. Under Poulit-Duquesne’s direction, the brand now debuts two haute joaillerie collections a year designed by creative director Claire Choisne: Histoire de Style, a nod to patrimony pieces, more diamond focused, and Carte Blanche, which zeros in on unexpected ideas of innovation — a core value from its founding — letting Choisne’s imagination roam wild.

With the way the CEO sees clients buying, “I know with some of them, it’s more like contemporary art. They know Claire, they know her work as if she was an artist, and they love the story behind it, like when you buy a painting from an artist,” she said, adding, “And for clients who want more classical pieces, big stones, probably investment pieces, we have that. I think we will find these two kinds of clients in the U.S.”

In the rear of the store, a side room for VIPs opens up, taking clients into the ambiance of 26 V, Boucheron’s private apartment in Paris. “Each VIP we tell a different story, “ the CEO said of the space, where Calico was chosen to create a cloud-patterned wallpaper, echoing the wall covering in the bedroom of the Vendôme apartment, reinterpreted with a pastel palette and applied to the ceiling, like a window onto a sunset sky.

The Parisian view all comes to life via a digital animation in the form of three windows that give Madison Avenue clients a view from the Boucheron boutique’s Salon de Lumière. As a final touch to this very exclusive setting, a Pierre Chareau sofa from 1923 was brought in, capping off the boutique’s conversation between heritage and modernity.

“We are always mixing very modern with very ancient,” she said.

The Madison Avenue store is the beginning of Poulit-Duquesne’s bullish strategy, with three more boutiques planned, first in Las Vegas at the Fontainebleau before the end of 2024, then Los Angles and Miami in 2025. Over the next several years Boucheron will “really be focused on stores,” the CEO said. “We’ll probably have two boutiques per year, steadily growing in the U.S.”

The opening will be marked by an immersive experience during New York Fashion Week on Sept. 10 at the Cooper Hewitt, Smithsonian Design Museum.

“We want to tell the story of Boucheron, but not in a very traditional way,” the CEO said of the the four-stage experience, which will revolve around the four creative pillars of the maison’s history. The first room will showcase the couture heritage of founder Frédéric Boucheron with a selection of archive pieces — never before seen in the U.S. Next, a room dedicated to innovation, with a display of Claire Choisne’s 26 new creations for the Carte Blanche Or Bleu collection, a unique ode to water. Another section will be devoted to the 20th anniversary of the Quatre ring — with a yet to be revealed updated take on the classic that prioritizes technology and innovation. Capping off the experience will be a bit of French art de vivre, in a winter garden that will echo the glorious Jardin d’Hiver inside Boucheron’s flagship in Paris.

The experience will runs from Sept. 10 to 12, with private appoints on Sept. 11, and opens to the public by reservation on Sept. 12.

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