When Chancellor Jeremy Hunt announced the abolition of the 225-year-old non-domicile tax scheme, a London-based billionaire took immediate action by leaving the UK.
According to his tax adviser, John Barnett, a partner at the law firm Burges Salmon, the billionaire left on March 6 with his family and private tutor aboard a private jet, declaring he would not return.
Barnett, whose firm specializes in advising the ultra-wealthy on tax matters, revealed that this client was among many non-domiciled individuals who had already fled the UK in response to the budget announcement.
The decision to scrap the non-dom tax regime by April 2025 has prompted a wave of departures among the super-rich, with more expected to follow.
“If you’re in the billionaire class, you’ve already got the houses elsewhere, you’ve got the private tutor for your children, you’ve got the private jet – you can leave straight away,” Barnett stated at a conference for the super-rich held at the Savoy hotel in central London.
However, he noted that for those not in the billionaire bracket, relocating involves more complex logistics, such as children’s schooling, spousal considerations, business matters, and housing arrangements, making it a decision that typically spans two to three years.
Despite the anticipated exodus, Barnett predicts many non-doms will maintain a presence in the UK, especially for social and sporting events during the summer.
“A lot of these people will make themselves non-resident but will probably still be able to spend three to four months here in the summer. So you can still go to Wimbledon, the Chelsea Flower Show, all those sorts of usual things.”
John Barnett
Recent HM Revenue and Customs data reported 68,800 non-doms in the UK for the year 2021-22. These individuals, who are residents in the UK but claim their permanent home (domicile) is abroad, benefit from significant tax advantages on their overseas income.
With the regime’s termination on the horizon, tax advisers are witnessing a surge in clients seeking to relocate.
Camilla Wallace, a senior partner at the London law firm Wedlake Bell, described similar sentiments among her clientele.
One notable case involved a Brazilian client who had heavily invested in refurbishing a central London property and was now contemplating an exit strategy.
Wallace’s advice to him highlighted the variety of attractive destinations, each with their unique appeal and tax incentives.
“It really depends on what you like. Some people like mountains and skiing, some people like glitzy stuff, so Monaco and Dubai are great for that. Others like islands and sailing,” she said, emphasizing the human element of such moves at the Spear’s 500 wealth management conference.
Ultra-Rich Moving To Tax Havens
Italy stands out as a favored destination due to its flat tax scheme, allowing wealthy individuals to pay a fixed €100,000 (£85,000) regardless of income.
Other European countries, including France, Greece, Cyprus, Malta, Portugal, and Spain, offer similar schemes to attract the affluent and internationally mobile. Spain’s expatriates tax regime, famously utilized by David Beckham during his Real Madrid days, remains a popular option.
“There’s a new [expatriate tax deal] every week – just keeping on top of it is difficult,” Barnett commented, with Wallace concurring, “We’re shutting down, and everyone else is opening up.”
Julia Hope, CEO of Innovate LSO Solutions, a company promoting relocations to Barbados, mentioned that such shifts are not limited to Europe.
“I’m sure we may well have a billionaire or two who can jump on their plane and just come across and spend some time at [the luxury resort] Sandy Lane or somewhere [else] exclusive.”
Julia Hope
Multi-millionaire non-dom entrepreneur Bassim Haidar echoed these sentiments, expressing his intent to leave the UK promptly.
Haidar lamented that the abolition of the non-dom regime “is going to cost me millions and millions of dollars and pounds every year in taxes on money that I’ve actually made abroad and businesses that I’ve built abroad.”
As the UK prepares to abolish a tax framework that has long benefited the super-rich, the resulting exodus marks a significant shift in the landscape of global wealth and residency.
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