Henley and partners published their private wealth migration report once a year. In their latest edition, the UK ranks dead last for the first time, with a net outflow of 16,500 millionaires. This figure has been quoted in parliament, picked up by newspapers and used to frame debates about Britain's global competitiveness. It's a very worrying number, but it's also quite hard to verify.
Tim Hartford looked into this claim on his BBC podcast More or Less. He interviewed the head of research at New World, Weld, who did the research underlying the migration report, who explained that their estimates rely on social media profiles, press coverage and company filings.
Hartford argued in his podcast, quite rightly, that their sample was not representative and that you couldn't draw conclusions from it. Dan Needle of Tax Policy Associates went further in a forensic review published on his website. He pointed out that the report was riddled with statistical red flags. The firm had dropped all property wealth from its analysis between 2023 and 2025, yet it's millionaire counts barely moved, a result Needle described as impossible if the
published methodology were real. New World Weld later told the FT that they hadn't actually changed their methodology, just their description of it. Needle found digit patterns in the data with a suspiciously high frequency of even numbers and numbers where trailing digits cluster on zeros and
fives with almost no ones. Statistically, he points out, the chance of that occurring naturally is about one in 240,000 More evidence, he says that the numbers were either manually created or manually adjusted. Needle's analysis used well established techniques to detect rigged numbers. I'll put a link to his more detailed analysis in the description, but he concluded that the figures were likely engineered rather than observed.
Now this doesn't mean that the rich are not leaving the UK, it just means that it's very difficult to know whether they are or not, simply because good data doesn't exist. To highlight the difficulty, the UK Office for Statistics Regulation recently suspended the official statistics status of the government's own Wealth and Asset Survey collected by the Office for National Statistics, following concerns raised by the ONS that the data is no longer of sufficient
quality to meet users needs. The Financial Times in a separate analysis, found that a wave of company directors have left Britain since the government abolished it's favourable tax treatment for non domiciled residents and raised other duties on the wealthy. They analyzed Companies House filings looking for directors of UK firms who updated their addresses to overseas jurisdictions.
This is not a perfect methodology either, which the FT highlighted in their column, as plenty of wealthy people don't run companies and plenty of directors don't update their filings in a timely manner. But a trend is visible in the data. In the most recent report, 3790 directors reported leaving the UK, up from 2710 the year before, and the spike that occurred in April coincides with the new tax changes. There are other signals being
reported, too. Butler agencies report fewer placements, wealth managers say that some clients are leaving, and London's luxury property market has softened. None of this is conclusive, but it's not nothing either. EU KS non Dom tax regime is not a recent invention. It dates back to the very first income tax in 1799, introduced by William Pitt the Younger to fund the Napoleonic Wars. At the time, all residents were taxed only on UK income.
In 1915 the rules changed. UK residents were taxed on worldwide income unless they could claim non domicile status, and that carve out remained largely intact for over a century. Non Dom describes Auk residence, whose permanent home for tax purposes is outside the UK domicile under British tax law has always been a bit of a funny
thing. It's the place that someone considers to be their permanent home and where they have the closest ties, and it refers to their tax status and doesn't necessarily relate to their citizenship or resident status, although it can be affected by these factors. A non Dom only paid UK tax on the money they earned in the UK.
They didn't have to pay tax to the UK government on money made elsewhere in the world unless they transfer that money back into the UK. For wealthy individuals, this presented the opportunity for significant and entirely legal tax savings, especially if you could claim a lower tax country
as your domicile. One of the best known non doms was former Prime Minister Rishi Sanak's wife, who, after a scandal broke a few years ago, announced that she would start paying UK tax on her worldwide income. Attempts to reform the non Dom rules over the years were frequent. Labour nearly abolished it in 1974. Niger Lawson tried again in 1988. During the financial crisis the regime was tightened where annual charges were introduced
for long term non DOMS. You had to pay £30,000 a year if you'd been resident in the UK for seven of the past nine years and £60,000 a year if you'd been resident for 12 of the past 14 years. The remittance basis was preserved, but access became more expensive and conditional. George Osborne made further changes in 2017, removing benefits for those who had lived in the UK for 15 of the past 20 years. But each time adjustments were made, Treasury officials warned of tax flight and ministers
backed down. The fear was that driving the wealthy abroad would harm the economy more than it would benefit from taxing them on their foreign earned income. In March 2024, then Chancellor Jeremy Hunt announced the abolition of the Non Dom rule. Ahead of the general elections in October, Labour Chancellor Rachel Reeves confirmed the policies and extending it to offshore trusts to prevent
inheritance tax avoidance. Now, foreign income and gains are taxed in the UK as they are earned once an individual has been resident in the UK for four years. On top of that, inheritance tax will apply to worldwide assets after 10 years and continue for 10 years after departure. The excluded property trust loophole is closed and the concept of domicile for tax purposes has been retired. There are transitional rules. Assets held before April 2025
can be rebased. Foreign income and gains can be brought into the UK at a flat 12% rate for a limited time. New arrivals get a four year grace period under the qualifying new resident regime. But the overall direction is clear. The UK is no longer a tax haven for the globally mobile. The Office for Budget Responsibility says that they expect up to 25% of non Doms to leave the UK. The Treasury forecasts £12.7 billion in revenue over five years.
Research from Warwick University suggests the fears of a mass departure may be overstated as when Osborne's 2017 change took effect, only 6% of affected non Doms left the UK. Those who stayed paid significantly more tax, on average an extra 100,000 £1000 per year, and the predicted mass exodus never came. The debate is still not over. This June, the Financial Times reported the chancellor, Rachel Reeves, was exploring A partial reversal of the inheritance tax
changes. Following lobbying from the City of London and a spate of high profile departures. The government is said to be considering adjustments to the 10 year tale or reintroducing trust protections. No formal announcement has been made, but the Treasury is watching the fallout closely. The VAT change on private school fees has added to this mood. From January 2025, independent
schools are subject to 20% VAT. The government expects a 10% average fee increase and up to 35,000 pupils to shift to state schools. For wealthy families already considering relocation, it's one more nudge. There have been a number of high profile exits. Lakshmi Mattal, the Indian born founder of Arsalore Mattal and Britain's 7th wealthiest man, is reported to be leaving, as is Nassif Sawaras, Egypt's richest person.
Richard Nodi, the South African born vice chairman of Goldman Sachs International, has left Britain for Milan and Beaufort. The Sanofi heiress moved her tax residence to Switzerland. A study of non doms in 2018 and those who had claimed the state has since 1997 found that more 93% were born abroad and another 4% had lived abroad for a substantial period. Most have genuine international ties.
When the UK changes the rules, these people have real ties abroad and can choose lower tax regimes if it makes sense for them. A paper from the London School of Economics on tax flight points out that people who have already migrated ones tend to be more responsive than natives to tax changes, and there's often a statistically significant migration response overall. None of this proves a mass departure, but it's not just noise either.
HMRC payroll data this August found no evidence to suggest that more non Doms left Britain than the 25% official prediction, according to the FT. Countries around the world are constantly adjusting their tax regimes. Switzerland offers lump sum taxation to high net worth individuals where a flat tax rate can be negotiated with local government authorities. Italy introduced a €100,000 flat tax on foreign income in 2017, later raising it to €200,000.
This has been popular with footballers, fashion executives and hedge fund managers. Portugal replaced its non habitual resident regime in 2024 with a narrower scheme focused on innovation and research. The UAE has no personal income tax and a nine percent corporate tax above $1,000,000. Andura offers a 10% income tax, no well tax and no inheritance tax. Golden visas are part of the strategy too. The UAE offers long term residency to investors. Italy and Greece have property
linked visa schemes. Donald Trump recently proposed a $5,000,000 Gold Card Visa for the US, a rebranding of the EB5 immigrant investor visa with fewer restrictions. To highlight how complicated some of this can be, last month, several senior bankers from Pictay, one of Switzerland's most prestigious private banks, relocated to Italy where they
could get lower taxes. The move triggered a tax debate in Geneva. A point of contention is that some foreigners in Switzerland pay less tax than citizens do. Critics argued that Switzerland's rigid enforcement was pushing talent away, while Italy's flat tax regime was pulling it in. Tax is only part of the equation. Wealthy individuals also consider lifestyle, legal stability and access to global markets. Jurisdictions that offer the right mix attract the rich, while others lose them.
Gabrielle Zilkman, the French economist known for his work on tax havens and inequality, has proposed a 2% annual wealth tax on billionaires. The idea gained traction in France's political circles earlier this year, with support from parts of the left and criticism from business leaders and economists across the spectrum. Zupman argues that the ultra wealthy are under taxed relative
to their income and assets. His proposal is designed to be enforceable through international cooperation and automatic exchange of financial information. He's also advising the G20 on global wealth taxation, pushing for a coordinated approach that would prevent capital flight. France has a history with wealth taxes. It repealed its own version in 2017 after years of debate over
its effectiveness. The tax raised modest revenue and was blamed for driving wealthy residents to Belgium, Switzerland and the UK. The debate over how taxes should work has spilled across borders. The former French Prime Minister recently accused Italy of engaging in fiscal dumping by luring wealthy French citizens with its flat tax regime. The Pictay bankers move from Geneva to Milan has sparked fierce debate in Switzerland. Wealth taxes are politically popular but economically fragile.
According to Economics Observatory, the number of OECD countries with annual wealth taxes dropped from 12 in 1990 to just three today. The reasons for dropping them are consistent low yield, high avoidance and administrative complexity. Mobility is no longer limited to billionaires. Increasingly, professionals in the upper middle class are making decisions about where to live based on tax, lifestyle and legal stability. The barriers to relocation have dropped.
Remote work, international schools and digital infrastructure have made it easier to live abroad without severing ties to home. In the United States, internal migration reflects similar patterns. States like Florida, Texas and Tennessee, which have no state income tax, continue to attract high earners from California, New York and Illinois. The shift isn't just about tax. It's also about housing costs, crime rates and the quality of public services. Digital nomad visas have added
another layer. Estonia, Portugal, Barbados and many other countries offer residency to remote workers earning above a certain threshold. These programs target professionals who aren't wealthy in the traditional sense but have portable incomes and flexible careers. Citizenship planning has become a cottage industry. Wealthy families now hold multiple passports, not for travel convenience but for legal
and financial flexibility. Some jurisdictions offer Plan B citizenships second passports designed to hedge against political or fiscal instability. The wealthy have always been mobile. What's changed is the scale. Mobility now extends to a broader segment of the population and governments are adjusting their policies accordingly. Governments are also just starting to run out of room. Across Europe, deficits are widening and the cost of borrowing is no longer trivial.
The post pandemic debt pile hasn't shrunk, it's instead been layered with new obligations, energy subsidies, inflation, linked benefits and now military spending. Ageing populations combined with high retirement benefits aren't helping either. Governments need to either raise taxes or cut spending, and there appears to be no desire to cut
spending. Tax revenue has to come from somewhere, but the traditional targets consumption, corporate profits and middle income earners are already strained. This is the tension. Fiscal sustainability demands revenue while global competitiveness demands restraint. The balance is hard to strike and easy to lose. In the 1970s, Britain raised its top marginal tax rate to 83% and 98% on unearned income, which means investment income and royalties.
The response was quick. The Beatles, whose music publishing income would have been classified as unearned income, shifted their financial operations offshore. The Rolling Stones left for France. Film stars, bankers and industrialists followed. Sotheby's held auctions on heirlooms from shuttered estates. Stately homes emptied out. The tax code had become a deterrent.
High earners who could move did. Today, the top rate of income tax in the UK on most income is 45%, so you would expect that there must have been a lot more income tax paid in the 1970s than today. But this chart from Tax Policy Associates shows that income tax raised about the same in the 1970s as a percentage of GDP as it does today. It's worth noting that the rich didn't end up paying a higher percentage of taxes back then either.
When taxes were at their highest in 1978 and 1979, the top 1% paid 11% of all income tax collected. Today in the UK the top 1% pay about 29% of all income tax collected. There were a few reasons for this change. Firstly, the top 1% today earn a lot more than the top 1% did in the late 70's. The nature of how money is made today, where technology can be leveraged to build scalable income, means that income is less tied to hours worked than it was in the past.
Secondly, in the wake of the financial crisis, tax rates went up a lot for higher earners. Thirdly, and possibly most importantly, higher earners are often in a position where they can control the size of their incomes and the timing of payments. While The Beatles and The Rolling Stones couldn't slow down their royalty payments, a business owner or a senior executive could defer payments
waiting for a better tax rate. Why would you pay yourself a high dividend or a bonus if the government would take 98% of it? You'd just leave it in the company. In the 1970s, benefits in kind were under taxed or completely untaxed so an executive could eat out, have a company car, take holidays and enjoy club memberships, all without being taxed. As Dan Needle explains in his blog, the UK tax policies of the 1970s were a failure.
They failed to tax the rich effectively, they failed to fix the government's fiscal problems, and they drove many wealthy Brits abroad who never came back. The 1970s are remembered for strikes and stagflation, but they also marked a turning point in how Britain treated globally mobile wealth. When the cost of staying rises, those with options start looking elsewhere. Those calling for a return to those types of policies are often doing so out of a desire to punish high earners.
According to Dan Needle, the lessons that can be drawn from that era are that the best way to tax the wealthy is to expand the base and close loopholes. Well, that makes a less snappy sound bite than sending rates sky high. The evidence and the history show that it's a fairer and much more effective method. The debate around wealth inequality often starts with a statistic and ends with a
slogan. Oxfam's claim that the richest 1% own more than the rest of the world combined gets repeated frequently, but the methodology behind it is rarely examined. The figure includes negative net worth, which means a recent medical school graduate with student debt is counted as poorer than a homeless person with no debt but with no employment. Prospect sex. That's not a meaningful comparison. Another example, Jerome Kerviel, the rogue trader who lost
billions for society. Generale is technically one of the poorest people in the world by net worth. His debts are so large that they skew the data, but he's not representative of global poverty. In the UK, the top 1% pay around 29% of all income tax. That share has risen over time and not fallen. The idea that the wealthy aren't contributing is popular, but it's not supported by the numbers. Inequality exists, but the shape of it is more complex than the
headlines suggest. Many of those counted as wealthy are business owners with volatile income or professionals with high earnings but limited assets. Where you live matters too. You can probably live more comfortably on $50,000 a year in Texas than on $100,000 a year in California, where everything costs a lot more. Many of those counted in broad based statistics as being poor are young, educated and on upward trajectories. According to research from the Institute for Fiscal Studies,
high earners in the UK are not a stable group. 1/4 of those in the top 1% in one year will not be there the next. After five years, only half will still be in the top 1%. Research from Cornell University shows that about 11% of American workers will move into the top 1% of income earners for at least one year between the ages of 25 and 60.
Hopefully you can see that the data is a bit more complicated than it first appears to be, and you need to look past the headlines and slogans to see what's actually going on. Whether the rich are leaving the UK or not in meaningful numbers is hard to pin down based on the available data, and it will take some time to work that out. The bigger issue is whether people, especially those with options, feel that they're getting value for money with their taxes.
Tax isn't just about rates, it's about trust. In Sweden, high taxes are tolerated because the system is transparent, the institutions are trusted and the public services work. Civil servants disclose their financial interests and one phone call will get you, your lawmakers tax statements. That kind of openness builds legitimacy and with it, compliance.
In the UK and the US, trust in government is lower, tax systems are more complex, and when people feel their money is wasted or mismanaged, they start looking for the exit. There's no perfect formula, but history offers clues and the international landscape offers comparisons. The challenge is to tax fairly, fund public services, and remain globally competitive all at the same time.
Thanks for tuning into this week's podcast, with special thanks to my supporters on Patreon whose funding makes this happen. Have a great week and talk to you again soon. Bye.