Is it because of high taxes that the wealthy are leaving the UK?

As a result of the Labour government's increased taxes, a record number of millionaires are leaving the UK

The best places for millionaires to migrate are revealed.

Since Labour took office last year, a record number of millionaires have left Britain because of increased taxes and the termination of non-dom status.

The Conservatives had already reduced the amount of money that wealthy households could keep from their income and investment gains by freezing tax thresholds and lowering dividend and capital gains allowances.

Before the general election outcome, many were already seeking to leave the UK for more tax-friendly shores, according to Henley and Partners, which counsels affluent people on investing for citizenship and residency.

These plans now seem to have accelerated following Labour's announcement of tax-raising measures that would affect employer national insurance contributions, private school fees, and inheritance tax.

According to Henley & Partners' analysis, this has caused thousands of millionaires to leave London, causing the city to experience the largest wealth exodus of any major city outside of Moscow.

In the last ten years, the number of millionaires in London has dropped by an astounding 12 percent, from approximately 245,000 to 215,700 millions.

10,800 high-net-worth individuals left the UK in 2024 alone, according to the study.

In 2024, 12 billionaires and 78 centimillionaires left the UK, making the outflow particularly significant at the top end.

According to Henley & Partners, 2024 was a record-breaking year for UK nationals applying for alternative citizenship and residency.

Compared to 2023, the number of British applications increased by 57%.

Why do wealthy people leave the UK?

The tax burden in the UK is at all-time highs, which deters wealthy people from choosing to live there.

People's earnings have been negatively impacted by fiscal drag caused by frozen tax thresholds.

The personal allowance is lowered by one for every two people over 100,000, and those making over 125,140 are subject to an income tax rate of 45%.

Since April 2024, the allowance for those who receive dividend income has decreased from £1,000 to £500, from £5,000 when it was first implemented in 2016.

Additionally, capital gains allowances have been cut in half since April, to 3,000.

The Conservative governments implemented these changes.

Since Labour took office, the government has implemented Tory policies that have increased employers' National Insurance, eliminated non-dom status, and increased capital gains tax to 18 percent for basic rate taxpayers and 24 percent for higher earners.

Starting in April 2027, pensions will also be considered part of an estate for inheritance tax purposes, and landlords and buyers of second homes must now pay an additional 5% stamp duty instead of the previous 3%.

Analysis indicates that parents will need to find an additional 111,300 per child for a full course of private education after Labour added VAT to private school fees.

To what places are the wealthy moving?

The UK's tax revenue is at an all-time high, but there are many places hoping to draw in affluent people with so-called golden visas in exchange for investments in government initiatives, commercial ventures, and residential construction.

The United Arab Emirates (UAE), which includes Dubai, is one of the most sought-after destinations, according to Henley & Partners.

Residents enjoy a luxurious lifestyle and pay no income tax. A record net inflow of 6,700 millionaires, including British nationals, is expected to arrive in the UAE this year alone.

There are now 81,200 millionaires living in Dubai, a 102 percent increase over the previous ten years. 20 billionaires and 237 centimillionaires are included in this.

People can apply for the UAE's golden residence visa by either purchasing a property with a minimum cash value of AED 2 million (roughly £550,000) or by taking out a loan from a particular local bank.

Another choice is to buy real estate off-plan from reputable real estate firms.

Partner Sinita Singh-Dalal, who leads Hourani's private wealth and family offices, says, "The evolution and development of the UAE's wealth management ecosystem is unprecedented."

"The United Arab Emirates has established a strong regulatory framework in less than five years, offering the rich a variety of creative ways to safeguard, maintain, and grow their wealth.

Other popular places for millionaires to migrate include the United States, where Florida is a popular destination for foreigners, Singapore, Canada, and Australia.

Through its immigrant investor program, the United States grants residency to individuals who invest £1,050,000 in a non-targeted employment area project or £800,000 in a targeted employment area project located in a rural or high-unemployment area.

As an alternative, a program is available to those who establish or maintain ten full-time, permanent positions for eligible Americans.

Singapore offers a residency investment program to support new businesses, family offices, or funds from the Singapore Economic Development Board.

By starting a business or raising funds through venture capital funds or angel investments, you can obtain Canadian residency.

Australia welcomes well-known and globally recognized talent from specific industries, including energy, defense, financial services, and education, instead of looking for foreign investment.

According to Volek, "the nations that have prioritized policies aimed at luring millionaires to their shores continue to have the biggest growth in high-net-worth individuals."

"In exchange for residency or citizenship rights, nine of the top ten nations in 2024 that will draw the greatest number of millionaires have official investment migration programs and actively promote foreign direct investment.

Spain, however, is one region that might lose appeal.

Spain eliminated its golden visa program in April, and there are even rumors that it might tax non-EU real estate buyers at 100%.

Portugal, Malta, Italy, Cyprus, and other European nations continue to be well-liked by foreigners and offer golden visa programs for individuals who invest specific amounts of money.