Dear Reader,
I’ve just worked my way through the Tax Justice Network’s paper, “The Millionaire Exodus Myth”. They take aim at Henley & Partners’ headline-grabbing claims of a mass flight in 2024 and – looking only as far as December that year – show that virtually no UK millionaires actually packed their bags. Fair play to the authors: for that narrow window they’re right. But their dataset stops four months before 6 April 2025, the day the Finance Act scrapped the remittance basis, so it can’t tell us what’s happening now.
Government spokespeople keep citing a Warwick-LSE model that mined anonymised HMRC records and forecast an extra £3 billion-plus a year in revenue with barely 80 people leaving. Nice econometrics – but it’s still just a model built on pre-2025 behaviour. Meanwhile ministers quote the Office for Budget Responsibility’s £33.8 billion five-year windfall as if it had already been banked, even though the figure comes from a Lords written answer that admits no fresh departure data exists.
What I’m seeing on the ground looks very different. Since Easter three long-standing clients have moved to Italy, Gibraltar and Cyprus, and the list of public departures keeps growing: Richard Gnodde of Goldman Sachs is heading for Milan; steel tycoon Lakshmi Mittal is preparing to follow; Egyptian billionaire Nassef Sawiris has shifted his base to Italy and Abu Dhabi; the Livingstone brothers have slipped off to Monaco; and, according to The Times, French pharma heiress Anne Beaufour and investor Max Gottschalk have left too.
Why are they going? The new Foreign Income & Gains rules give newcomers four tax-free years and then haul them onto the full UK tax net. At the same time – still only a proposal, but spelled out in May’s Home Office white paper – the government wants most migrants to wait ten years before they can settle. If that change goes through, anyone who arrives today faces at least five years of top-rate tax with no guarantee of permanent status. Unsurprisingly, many well-heeled arrivals are doing the sums and deciding four years is enough.
Those determined to stay are being nudged into more complex planning. Offshore insurance bonds and non-reporting funds are perfectly legitimate ways to roll up income and gains until you’re non-resident again, but they cost money to set up and still leave the Treasury empty-handed. Add to that the sense of betrayal among longer-term residents who trusted the 2017 “protected settlement” rules to shield their offshore trusts – rules that vanished overnight on 6 April 2025 – and goodwill is wearing thin.
One client who has chosen to remain put the macro picture starkly. He reckons around 12 000 wealthy families have already left or are leaving. On his back-of-the-envelope maths that’s more than £1 billion a year in lost direct tax, another £750 million in lost VAT, £7.5 billion wiped from domestic trade, and roughly 45 000 jobs gone – before you even count the second-round effects. I can’t vouch for every pound and job in his estimate, but the soft patch in prime-London property and luxury retail suggests he’s not miles off the mark.
So, yes, the Tax Justice Network is right that Henley’s 2024 scare story was overblown – but 2024 is ancient history in tax terms. The real test is playing out now, and the early score-line is clear enough: Milan, Nicosia, Monaco and even Gibraltar are picking up people (and their spending power) that London has chosen to let slip. Unless the UK lines up its tax offer with its immigration rules – and finds a way to keep promises it made back in 2017 – the talk of a “mythical” exodus will look more wishful than factual.
Just as I was about to hit “send” on this newsletter, The Times dropped a new piece (12 June 2025) that underlines everything above. Drawing on Companies House records, it says 4,400 company directors have already shifted their residential base overseas in the past twelve months, with April departures running 75 per cent higher than a year ago and the steepest losses coming from finance, insurance and property – classic non-dom territory. The same article cites Foreign Investors for Britain’s estimate that more than 12,000 non-dom families have relocated and Bloomberg’s calculation that the UK suffered a net loss of 10,800 millionaires in 2024, second only to China. Oxford Economics adds that 60 per cent of tax advisers expect over 40 per cent of their non-dom clients to leave within two years, and the roll-call of individual exits now includes not only Richard Gnodde and the Livingstone brothers but also boxing promoter Eddie Hearn, pharma heiress Anne Beaufour, investor Max Gottschalk, fund manager Alexander Ginzburg and JC Flowers co-president Tim Hanford. In short, the latest hard numbers from The Times line up squarely with what clients, colleagues and I have been witnessing for months – and with the doubts I’ve raised about the Tax Justice Network’s comforting narrative.
With warm regards
Dmitry Zapol
Partner, international tax advisor, ADIT (Affiliate)
IFS Consultants, London
(www.ifsconsultants.com, dmitry@ifsconsultants.com)
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