Just a month ago, the abolition of the UK’s non-domiciled tax regime made headlines as it was reported that billionaire steel magnate Lakshmi Mittal, a long-time UK resident of nearly 30 years, was preparing to leave the country. While Mittal may be one of the most high-profile names to exit, he is far from alone.
The UK is experiencing an unprecedented exodus of its wealthiest residents. In 2024, approximately 10,800 millionaires left the country—marking a staggering 157% increase from the previous year. This dramatic shift is largely attributed to sweeping tax reforms, including the abolition of the non-dom regime and proposed hikes in capital gains and inheritance taxes. These changes have driven many high-net-worth individuals to relocate to more tax-friendly jurisdictions such as Switzerland, Italy, and the UAE.
Reflecting this trend, the 2025 Sunday Times Rich List reported a sharp drop in the number of UK-based billionaires, down to 156, the steepest decline in the list’s 37-year history. (Full story on page 18)
According to Prof Abhinay Muthoo, a Research Lead & Fellow at the National Institute of Economic and Social Research (NIESR), this recent exodus appears to be a short-term reaction to specific, well-signalled tax reforms. “These measures were expected and, in many cases, long overdue. They aim to modernise the system, close loopholes, and restore fairness,” he said.
While Prof Muthoo pointed out that there is a broader concern about whether these changes, alongside factors like post-Brexit uncertainty, regulatory friction, and global tax competition, could gradually erode the UK’s appeal to international wealth and investment, he noted that there is little sign so far of a fundamental shift.
“Long-term competitiveness will depend not just on tax policy, but on the UK’s ability to deliver skilled talent, robust infrastructure, and policy stability,” he pointed out.
“There may be short-term losses in capital or philanthropy, but with the right long-term strategy - clear fiscal rules, support for productive investment, and targeted infrastructure spending - the UK can remain a highly attractive economy while advancing a fairer and more resilient model of growth”, Prof Muthoo added.
Key drivers behind the exodus
As the UK grapples with how to retain its wealthiest residents, it is important to understand the underlying factors that are leading to this phenomena and if experts are to be believed, it’s more than just the tax reforms.
According to Hugh Lind, an economist at the Centre for Economics and Business Research, taxation plays a significant role in influencing where wealthy individuals choose to reside—but it is far from the only factor. Economic stability, social infrastructure, and cultural appeal are also key considerations.
“Our research shows that the UK would start experiencing a net fiscal loss from these reforms if just 25% of affected non-dom taxpayers leave the country,” Lind explains. “Based on Oxford Economics’ surveys and the Office for Budget Responsibility’s own assumptions, this scenario is well within the bounds of possibility.”
According to him, while the number of taxpayers directly impacted by the non-dom changes may appear small—just 37,800 claimed non-dom status in the 2022 tax year, and only 2,400 paid the remittance basis charge and these individuals are the ones who typically represent the top tier of wealth and economic contribution. The inclusion of foreign assets under UK inheritance tax further amplifies the impact on this group.
Other compounding factors also make the UK less attractive for high-net-worth individuals. Slow economic growth, declining public services, especially within healthcare, and the proposed VAT on private school fees are all seen as deterrents.
“There’s also the matter of network effects,” Lind adds. “Wealthy individuals tend to group together in countries and cities where other wealthy individuals reside, hence there is a risk that the outflow accelerates over time.” Brexit has further complicated matters, introducing frictions with Europe that may prompt internationally connected individuals to move to the continent.
Prof Muthoo, on the issue, added that Labour ending long-standing privileges for internationally mobile wealth is a major factor. At the same time, rising business costs, post-Brexit regulatory shifts, and growing global competition - from places like the UAE and Singapore - are making other locations more attractive.
However, he does point out that, “it is important to separate tax-driven relocation from full economic disengagement. Many of those leaving remain invested in UK assets and businesses.”
Hugh also highlighted the growing popularity of the UAE. He said, “The UAE has been a primary destination for HNWIs in recent years. Zero taxes on income and wealth, combined with political stability and improving public services present a strong offering to HNWIs.”
London’s loses big due to exodus
London’s exodus of millionaires over the past decade may be as damaging as the United Kingdom losing nearly 1.5 million taxpayers, according to analysis for The Standard.
Since 2014, the capital has lost 30,000 millionaires to foreign countries, with more than 11,000 leaving in the last 12 months alone. This means that, on average, eight millionaires have left the city every day over the past ten years, according to a study conducted for advisory firm Henley & Partners by New World Wealth.
Research by the Adam Smith Institute estimates that each millionaire who left London in the last decade would have paid at least £393,957 in income tax per year. The free-market think tank claims that the tax contribution of one millionaire is equivalent to that of 49 average taxpayers leaving the UK.
As a result, the Exchequer may be facing a revenue shortfall equivalent to losing 1.47 million average taxpayers. This figure is roughly larger than the combined populations of Cardiff, Edinburgh, and Belfast.
Currently, London has around 215,000 millionaires but has lost 12 percent of its wealthiest residents since 2014. In absolute numbers, no other city has lost more millionaires than London, with approximately 30,000 departing over the past decade.
From the 1950s to the early 2000s, Britain—especially London—was one of the world’s top destinations for migrating millionaires. It has long attracted wealthy families from mainland Europe, Africa, Asia, and the Middle East. Notable high-net-worth individuals who have left London recently include Egypt’s richest man Nassef Sawiris, steel tycoon Lakshmi Mittal, and German crypto investor Christian Angermayer.
Signal of a more fundamental shift in the UK's economic appeal?
Prof Muthoo also highlights that the broader macroeconomic effect of the wealth exodus is likely more modest than headlines suggest. “The UK remains a global hub for business, finance, and innovation, and most jobs are driven by the wider business ecosystem, not just the ultra-wealthy”, he said.
He further added, “Many of the tax reforms were long overdue. The non-dom regime, in particular, had become symbolic of unfairness in the system. Its removal helps rebuild trust and signals that all forms of wealth - especially inherited or offshore - should be taxed equitably. That’s vital for long-term social cohesion and economic legitimacy.
“There may be short-term losses in capital or philanthropy, but with the right long-term strategy - clear fiscal rules, support for productive investment, and targeted infrastructure spending - the UK can remain a highly attractive economy while advancing a fairer and more resilient model of growth.”
Discussing the long-term fiscal strategies that the government should consider to balance equitable taxation with the need to maintain a robust economic base, Prof Muthoo points out that the balance needs to be made in fairness with competitiveness - restoring trust in the tax system while attracting investment, talent, and innovation.
He said, “Fairness and efficiency must go hand in hand. Reforms like ending the non-dom regime and tightening inheritance tax were necessary, but the system now needs to be simpler, more predictable, and more transparent to reduce avoidance and boost compliance. Taxing wealth and unearned income more consistently - for example, aligning capital gains rates more closely with income tax while protecting genuine business reinvestment - can broaden the base without harming growth.
“Stability is essential. Frequent tax changes undermine confidence, so the government should commit to multi-year tax frameworks. A modern industrial strategy - backed by smart fiscal incentives for R&D, skills, and green tech - will support long-term growth. Reforming outdated taxes like council tax and business rates is also overdue. In short: fairer, simpler, and more strategic taxation, paired with targeted investment, is the path to a stronger, more inclusive economy.”
As the government seeks to balance fiscal responsibility with economic growth, the challenge remains: how to retain and attract wealth creators without compromising on tax fairness.
Another miss for the government with the “strangers” remark
While the UK is already struggling to retain its wealthy, Keir Starmer has made another blunder by giving immigrants the tag of “strangers” as he introduced the Immigration White Paper.
Maybe looking at the Rich List, the prime minister will realise that it is the immigrants who he wants to drive away that are leading the list. The Hinduja and Ruben family are able to contribute to the country today only because they were welcomed in the country with open-arms and their endeavours were supported.
With only approximately 7.5% of the United Kingdom's population identifing as being of South Asian heritage, there are 27 of them on the list and contribute significantly to the economy. British Indians are among the most affluent ethnic groups in the UK and have the highest median total household net wealth, estimated at £347,400, surpassing that of White British households at £324,100.
Keir Starmer’s remarks, intentional or not, are so ridiculous that Nigel Farage, the man with the most anti-immigrant rhetoric, has been criticising him. Additionally, Sadiq Khan, from Starmer’s own party, distanced himself from Sir Keir’s comments, saying they were “not words I would use.”
Former Scottish First Minister Humza Yousaf has also condemned Starmer’s recent immigration remarks, calling them a "dog whistle".
The government faces pressure to control both legal and illegal immigration amid rising support for Reform UK. Yousaf warned the UK risks “handing the keys of No 10 to Nigel Farage.”