A survey of 200 multi-millionaires, each with a personal fortune of at least £50m, carried out by accountancy firm BDO, found that two-thirds had considered relocating over the past twelve months. The most striking finding, however, was the reason: 42 per cent pointed to inconsistent tax policies as the principal factor behind their deliberations, while just 18 per cent cited high tax rates alone.
The distinction matters. Britain has long taxed at rates comparable to or above those of its European neighbours, yet the ultra-rich have historically stayed put. What appears to have shifted the calculus is a succession of policy reversals and threatened reforms under Labour, particularly around inheritance tax and capital gains tax, that have left wealthy individuals unable to plan with any confidence.
Elsa Littlewood, a tax partner at BDO, said that many of those considering departure would prefer to remain but feel unable to manage long-term wealth planning against such an unpredictable backdrop.
Since Labour took office, a string of high-profile departures has underlined the trend. Hedge fund manager Michael Platt relocated his family office to Dubai. Norwegian-born shipping magnate John Fredriksen put his £250m Chelsea townhouse on the market. Richard Gnodde, formerly Goldman Sachs’s most senior banker in Europe, moved to Milan, whilst brothers Ian and Richard Livingstone shifted their primary residence to Monaco. Indian billionaire Lakshmi Mittal, a British resident for nearly three decades, also moved to Dubai, as did Egyptian businessman Nassef Sawiris.
The exodus began in earnest when Rachel Reeves, upon becoming Chancellor, abolished the non-domicile status, a long-standing tax regime that had made Britain attractive to internationally mobile wealth. A proposed 40 per cent inheritance tax on worldwide assets provoked such fierce opposition that it was subsequently scaled back, but by then confidence had already been dented.
Ms Reeves’s second Budget in November compounded the uncertainty. Having signalled possible increases to capital gains tax, she ultimately left CGT largely untouched but raised rates on savings and dividends and introduced what critics dubbed a “mansion tax” on higher-value properties, a set of measures that few had anticipated.
Maxwell Marlow, a director at the Adam Smith Institute, warned that the absence of any replacement scheme to attract wealthy investors’ capital and spending to Britain meant the broader population would bear the cost.
For Business Matters readers running or advising businesses that depend on access to high-net-worth capital, the message from BDO’s research is clear: it is not the size of the tax bill that is driving people away, but the inability to know what that bill will look like next year. Certainty, it seems, has become the scarcest commodity in British fiscal policy.
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Labour’s tax uncertainty is pushing Britain’s wealthiest towards the exit