Number of millionaires leaving UK spikes under Labour as tax changes slammed as 'monumental act of national self-harm'

Many of these millionaires are moving to European countries like Italy and Switzerland, as well as to places such as the United Arab Emirates, according to data from global research firm New World Wealth.

The outflow of wealthy individuals has increased following Labour’s election win, with many UK-based entrepreneurs preparing to leave.

A significant factor in this migration is Labour’s planned abolition of the non-domicile (non-dom) tax regime, which will take effect in April 2025. Under the current system, non-doms are allowed to avoid UK taxes on income and assets earned outside the country.

David Hawkins, of Foreign Investors for Britain, a group representing non-doms explained the Government’s policy is “a monumental act of national self-harm”.

He said: “It appears that decisions have been made not based on the evidence but based on ideology. It’s a real worry because more and more people are leaving. And it’s businesses, jobs, investment, spending into the economy and tax take and philanthropy that are hit.”

The planned reforms will replace this system with a residence-based tax structure, including UK inheritance tax on overseas assets.

A survey by Oxford Economics, which questioned 700 non-doms, found that nearly two-thirds of them were thinking about leaving the UK due to the planned tax changes.

The Office for Budget Responsibility (OBR) estimates that 12 per cent to 25 per cent of the 70,000 non-doms in the UK may choose to leave once the new rules come into effect.

While Chancellor Rachel Reeves expects the reforms to raise £13bn over five years, Oxford Economics warns that they could actually cost the UK government £1bn annually due to the loss of wealthy taxpayers.

Charlie Mullins, founder of Pimlico Plumbers, who has moved to Spain, shared his concerns about the situation, stating that the UK is facing serious economic challenges.

He said: "Britain is in trouble. I'm not going to blame Labour completely, the Tories also lost the plot, but Labour have made it worse. They've raised taxes, and added new employment laws like getting a contract from day one. It makes it hard to run a business."

These comments come as tax advisers report increasing numbers of entrepreneurs preparing to leave following tax rises announced in Rachel Reeves' Autumn Budget.

The scale of the wealth exodus represents a 157 per cent increase from 2023, when 4,200 millionaires left the country. Only China lost more wealthy residents during this period, according to New World Wealth's analysis.

This marks a significant shift for the UK, which had long been one of the world’s top destinations for millionaires, especially from mainland Europe, Africa, Asia, and the Middle East.

Among those leaving the UK are 78 centi-millionaires (worth over £100 million) and 12 billionaires. Popular destinations for these wealthy individuals include cities like Paris, Dubai, Amsterdam, Monaco, Geneva, Sydney, and Singapore.

In addition, regions such as Florida, the Algarve in Portugal, Malta, and the Italian Riviera have become attractive retirement spots for British emigrants.

Several factors are contributing to this wave of departures. Along with the tax changes, there are concerns about the declining importance of the London Stock Exchange and what analysts describe as the “deteriorating” state of the UK’s health system.

Furthermore, the UK’s traditional advantage of being an English-speaking country has been reduced as other English-speaking nations have grown in appeal.

Foreign Investors for Britain, a group representing international investors in the UK, has criticized the planned changes to the non-dom tax system.

In November, wealth advisors warned that scrapping the non-dom regime without a suitable replacement was a "monumentally stupid decision."

A Treasury spokesperson said: "We are committed to tax reforms that are progressive and underpinned by fairness. It is right that those who can afford to, contribute their fair share to fix the foundations to provide stability and fund public services to drive growth."