Why Britain’s super-rich are looking for the exit
Tax rises, political instability — and the fear of worse to come — are forcing the UK’s wealthiest residents to reconsider their future in the country
On Monday night at the British Museum in London, high-profile guests gathered to celebrate the unveiling of the Bayeux Tapestry, a triumph for the museum’s chair, former UK chancellor George Osborne.
But talk at the reception soon turned to another significant event: news of the departure from the UK of billionaire Chris Rokos. The founder of hedge fund Rokos Capital Management — and one of the UK’s biggest taxpayers and philanthropists — was moving his residence to Greece.
Rokos’s move is a coup for Greece, which has lured investors with a new package of fiscal sweeteners. For Britain, it marks the latest exit of a wealthy financier and compounds fears that rich people are being driven out of the country because of higher taxes and an unstable business and political environment.
It also comes at a sensitive time for the UK government. This week Labour chancellor John Healey put Britain on notice for a tough Budget next month and Bank of England governor Andrew Bailey warned that UK inflation risks were “on the upside”.
“Everyone is looking at the fiscal situation and saying that these sums don’t add up,” said one City grandee, who worries that a tax-raising Budget is inevitable. “It’s the tinkering that people don’t like. Once you start tinkering, they don’t know what’s coming next.”
This so-called tinkering began roughly a decade ago when, as Conservative chancellor, Osborne set his sights on the non-dom regime, which was then abolished in March 2024 under chancellor Jeremy Hunt. A year later, Healey’s predecessor Rachel Reeves followed with proposals to further toughen the crackdown.
As well as this, over the past two years, taxes have increased on inheritances, pension pots, profits on private equity investments, employer national insurance contributions and capital gains. Healey has not ruled out a windfall tax on banks, and business and the wealthy are braced for further raids.
“Clients frequently say there has been too much change [in the UK] so they can’t plan for the long term,” says Elsa Littlewood, a private client tax partner at BDO. “People are craving that certainty and stability.”
Comprehensive data on non-dom departures and the flight of high-net-worth individuals is hard to come by. According to figures published by HM Revenue & Customs, the number of “non-doms” dropped by less than 1 per cent immediately after UK ministers confirmed the end of the favourable tax status.
About 73,400 individuals claimed non-domiciled taxpayer status in 2024-25, a fall of 0.5 per cent, or 400, compared with the previous year. However, interviews with private banks, wealth managers and advisers suggest that these figures are much higher.
The crucial bugbear for many — according to high-net-worth individuals and their advisers — is that UK inheritance tax, levied at 40 per cent above a certain threshold, is among the highest in the developed nations. Moreover, following Reeves’ crackdown, foreign assets can no longer be sheltered from UK inheritance tax.
“To the tens of friends and family that have left, the one thing that would bring most of them back is if the government would do away with inheritance tax on foreign assets,” said the chief executive of an international private equity firm. “That’s the single biggest trigger that they say caused them to leave.”
For UK businesses, new rules came into effect earlier this year that limit inheritance tax relief on business property. Business assets over £1mn will now be charged inheritance tax at 20 per cent, a particular blow to family businesses.
It can be “existential” for a business if it suddenly needs to raise 20 per cent of its value in cash, said Chris Groves, partner and co-head of the European private client and tax team at law firm Withers.
The idea that a businessperson’s descendants might have to jettison their life’s work because of a change in the tax regime is too much for some people, he added. “They would rather be in a country that wants their businesses to continue to grow.”
Healey has said he wants Britain to be a “country of wealth creation”. The old non-dom regime has been replaced by a new system that gives qualifying new residents 100 per cent tax relief on foreign income and gains for the first four years of UK tax residence. But advisers said this should be lengthened to 10 years, to encourage people to put down roots in Britain. Others have suggested that a flat-tax regime, akin to Italy or Greece, could also attract high earners.
Against this uncertain backdrop, people are making contingency plans and evaluating their presence in the UK. One UK-based hedge fund manager overseeing billions of dollars said he has already put in place the structure to be able to quickly relocate his business to Zurich if the fiscal environment under Labour becomes less favourable.
“The UK is the highest-tax jurisdiction we do business in,” said the boss of a US bank. “A bank tax would be a problem for the UK . . . you would have fewer jobs in finance. I’ve told the government not to be complacent.”
Meanwhile, countries from Greece to Italy are moving quickly to capitalise on Britain’s mis-steps.
“It used to be the case that if you were a tax exile you had to live on an island somewhere and not have much fun,” said Groves at Withers. “Now you can live in Milan or Athens and these are really cosmopolitan global cities.”