Several countries, including Italy, Abu Dhabi, and Cyprus, are actively seeking to attract wealthy individuals from the UK following the government’s decision to abolish the non-domiciled (non-dom) tax status.
Events are being held across London to encourage the UK’s estimated 67,000 non-doms—UK residents whose permanent home is outside the country—to relocate in the wake of Labour’s election victory and subsequent Budget.
Next month, a Cyprus government agency will co-host an event at the London Stock Exchange aimed at persuading high-net-worth individuals to move. Similarly, the Abu Dhabi Investment Office recently hosted an event at London’s Jumeirah hotel to entice affluent Britons. Italian law firm Chiomenti sponsored a Henley & Partners event titled “Non-Doms: ‘Should I Stay or Should I Go?’” to discuss relocation options.
Nick Candy, a British property developer who attended the Abu Dhabi event, expressed concerns about a potential exodus of talent. “We’re going to have the largest brain drain of talent that this country has ever seen. And they won’t come running back,” he told Bloomberg.
Financial advisers report a surge in wealthy clients preparing to leave the UK after Labour confirmed plans to abolish the non-dom regime, which offers significant tax benefits for expatriates. David Lesperance, an international tax adviser, noted he is “very busy” assisting non-doms considering relocation. Tim Stovold, a partner at accountancy firm Moore Kingston Smith, said more people are exploring options in countries like Spain and Portugal, which offer attractive tax regimes.
Currently, non-doms residing in the UK are not required to pay local taxes on overseas earnings for up to 15 years. The government plans to abolish this regime next April, replacing it with a time-limited grace period.
The special tax status has been a point of contention, as it predominantly benefits wealthy foreigners. Supporters argue that it keeps affluent individuals in the UK, contributing to the economy through their spending.
Prominent figures are already taking action. David Sullivan, chairman of West Ham United, blamed the crackdown on non-doms for his decision to sell his London mansion at a loss. Charlie Mullins, founder of Pimlico Plumbers, has also put his £12 million London penthouse up for sale to avoid increased taxation, stating he is ready to have “no assets in the UK whatsoever.”
According to the London School of Economics, one in five bankers were reported to be non-doms in 2022, and four in ten individuals earning £5 million or more in 2018 had claimed non-dom status at some point.
Read more:
Italy, Abu Dhabi, and Cyprus Court Britain’s Wealthy Amid Non-Dom Tax Changes
