Non-doms leave Britain after tax loophole closes

Times

12-06-2025

There has been a sharp increase in business leaders moving out of the UK, according to an analysis of company filings, as fears grow about the impact of changes to the non-domiciled tax regime.
More than 4,400 directors have fled over the past year, including a big jump in numbers over the past few months, according to Companies House records. Departures in April were 75 per cent higher than the same month last year. The pace of exits was highest in finance, insurance and property, which are all popular with non-doms.
The analysis, by Bloomberg, suggests that Labour's tax changes are fuelling an exodus of top talent.
In April, the government abolished the centuries-old non-dom tax regime, which allowed wealthy foreigners living here to shelter their worldwide assets from British taxes for an annual fee starting at £30,000.
In its place, the Treasury introduced a much-less generous residence-based system. This requires any wealthy foreigners who have lived in the UK for longer than four years to pay income and capital gains taxes on their global earnings. If they stay long enough, their worldwide assets will also become subject to inheritance tax of 40 per cent, which is one of the highest rates in the world.
There are no definitive figures on how many non-doms have left but a recent survey by Oxford Economics found that 60 per cent of tax advisers expected more than 40 per cent of their non-dom clients to leave within two years of the policy change.
When Labour's plans were announced, the Office For Budgetary Responsibility (OBR) estimated that between 12 and 25 per cent would go.
Foreign Investors for Britain, a lobby group representing wealthy overseas investors, believes that more than 12,000 of the estimated 74,000 non-doms in the UK have already relocated with many more planning to leave over the coming months and years.
There are also reports that many wealthy Britons are leaving. New World Worth estimates that the UK lost a net 10,800 millionaires to migration last year, a 157 per cent increase on 2023, meaning it lost more wealthy residents than any other country except China. The Bloomberg analysis found that the United Arab Emirates was the most popular destination for relocating directors.
There are varying accounts from economists on what proportion of non-doms would have to leave to result in the policy being a net drain on tax revenues, but most consider that if more than a quarter go, tax receipts might fall.
The OBR's initial analysis suggested that the policy would increase revenues by £33.8 billion over the next five years, although critics say this figure is deceptive because it is artificially inflated by a temporarily lowered tax rate on cash being brought into the UK by any non-doms who choose to stay.
Many economists also question the analysis and believe the policy could easily end up costing the exchequer money when non-doms' overall contribution to the economy is taken into account.
Research by Oxford Economics found that each non-dom contributes, on average, £400,000 annually in direct taxes, spending, and business activity — while on average they invest £118 million.
However, others question these numbers. Fariya Mohiuddin, of the campaign group Tax Justice UK, described figures on the number of wealthy people leaving the UK as 'scaremongering and statistical obfuscation by companies that represent the interests of billionaires and multimillionaires'.
She said: 'Taxing the super-rich to revitalise key services like the NHS and education, that we all rely on, is more urgent than ever. Taxing the wealth of the richest is simply not going to cause a mass exodus.'
Nonetheless, a growing list of high-profile business people, wealthy individuals and investors have left. Bloomberg reports that the billionaire French heiress, Anne Beaufour, the German investor, Max Gottschalk, the chief executive of Magna Capital, Alexander Ginzburg, the co-president of JC Flowers, Tim Hanford, and the boxing promoter, Eddie Hearn, are among the names to relocate in recent months.
Leslie Macleod-Miller, of Foreign Investors for Britain, said: 'We're not just losing individuals—we're losing ecosystems of innovation, philanthropy, and investment.'
The Treasury declined to comment.