The U.K. is increasingly becoming a no-go area for millionaires, as a record number flee the country thanks to a “perfect storm of Brexit fallout, political uncertainty, and a controversial overhaul of the non-domicile tax regime.”
Henley & Partners’ latest Private Wealth Migration Report 2024 predicts that 9,500 millionaires are expected to leave the U.K. through 2024, more than double last year’s figure. The country is second only to China in millionaires set to leave its shores this year.
The United Arab Emirates continues to snatch millionaires from other countries, enticing them with ultra-attractive traits like golden visas, zero income tax, and a focus on flashy luxury. The region will add 6,700 millionaires this year.
Year of democracy
It’s no surprise that 2024 will likely be a record year for the global migration of millionaires. More than 2 billion people will head into polling booths this year, the most on record, with the ramifications.
At the same time, geopolitical volatility is at a generational high, according to the World Economic Forum, creating an urgency to move money around the globe.
The U.K. public will go to the polls in July to elect a new government, with the center-left opposition Labour Party the overwhelming favorite to replace the ruling Conservative Party.
The party is expected to clamp down on wealth-building avenues used by the wealthy, including tax avoidance loopholes and controversial “non-dom” status. It is also planning to slap more VAT on private school fees.
The Conservatives also plan to launch a non-dom clampdown, which opponents say is a mistake.
“While it may have been clever politics, it was a red flag for the global wealthy elite, who saw Britain’s right-of-center party suddenly prepared to play fast and loose with the established rules affecting them for short-term political gain,” said Alec Marsh, a contributing editor to the wealth management magazine Spear’s.
The U.S. is bracing for its own political shift, with Donald Trump facing off against President Joe Biden for the presidency later this year.
While Trump is likely to prove broadly popular with the wealthy thanks to his liberal fiscal stance, others haven’t shaken the memories of his last stretch in office and his legal troubles since exiting.
Speaking to Fortune in March, wealthy Americans detailed how they were eyeing property in Europe before the November election as a possible escape route from another Trump presidency.
Inquiries over passports and citizenship routes have spiked in the last year as U.S. citizens become anxious about the political situation at home, advisors told Fortune.
The U.S., however, is expected to add about 3,800 millionaires this year, according to Henley. The country has enjoyed a 62% increase in its millionaire population since 2013.
In France, the threat of a showdown between the far left and far right of the political spectrum has the wealthy fearing aggressive tax hikes or crumbling confidence in its public markets. They, too, might seek refuge abroad.
British exodus
For the U.K., the latest record flight of millionaires isn’t an anomaly based on the political context but part of a long-running trend of the wealthy leaving the country.
There are currently 602,500 millionaires in the U.K., according to Henley, but the country has lost 8% of its millionaire population since 2013.
“Unfortunately, since the Brexit referendum in 2016, Britain has had the reverse Midas touch, struggling to retain its place at the top table for attracting global wealth,” said Spear’s Marsh. “Over that time, sterling has underperformed, but not as much as the country’s prime financial index, the FTSE 100, which until earlier this year was as lackluster as the wider U.K. economy.”
