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Stark warnings have surfaced since the U.K.’s tax crackdown on the wealthy that an exodus of the mega-rich is underway. Hard data has yet to back up the trend.
At the heart of the potential flight are changes to the British tax system, from capital gains and inheritance tax to extra stamp duty rates. In particular, the abolition of the so-called non-dom regime, which allowed wealthy foreigners to avoid paying tax on earnings outside the U.K. and to elude inheritance duties on their global assets, courted much controversy.
The fear is that an exodus of wealthy people will translate into lower economic growth and diminish the UK’s attractiveness as a place to live, invest, and do business.
“We know that the top 1% and the top 0.01% pay a very high proportion of taxes in this country, so the tax base starts to shrink. The second thing is, you lose the benefit of the money that they spend in the economy. That’s not just about people that they employ, but it’s also about things like philanthropy,” said Jenkins, who is now the CEO of 10x Banking.
“What we really need most of all in this country, is people to start and grow businesses. And that means we have to be an attractive location for capital for starting businesses,” he added.
There are even warnings that the Labour party risks taking Britain back to the challenges of the 1970s, notably under then Finance Minister Denis Healey. At the time, a high-tax and anti-business environment pushed tens of thousands of people out of the country in the “Brain Drain.”
Adding to the uncertainty is whether the current Chancellor of the Exchequer Rachel Reeves will introduce further changes to taxes in the upcoming Autumn budget, such as a potential wealth duty.
However, claims of a mass exodus of wealthy non-doms in response to tax rises may be overblown. Initial tax data suggests the number leaving of people the country is in line — or below — official forecasts from the Office for Budget Responsibility, which forecast that 25% of non-doms with trusts and 12% of those with trusts would flee the U.K. over 2025-26 in response to the abolition of the tax status.
This casts shadow over a widely cited report published in association with Henley & Partners, a British investment migration consultancy, which claimed that 16,500 millionaires would quit the country in 2025. Critics have previously questioned the study for depending heavily on data from LinkedIn, which is not reliable in finding someone’s tax residence.
Berenberg Economist Andrew Wishart said the potential outflow of wealthy people will impact some parts of the economy more than others.
“It’s going to affect the top end of London’s property market. So there are going to be pockets that are quite severely affected by this exodus. However, for the U.K. economy as a whole, that’s a very small part of the pie,” he said.
The U.K. is set to publish an estimate of how many non-doms left the country due to the new rules in 2027.
