Several countries, including Italy, Abu Dhabi and Cyprus, are actively trying to attract wealthy individuals from Britain following the government’s decision to abolish the tax status of non-domiciles.
Events are being held across London to encourage Britain’s estimated 67,000 non-doms – British residents whose permanent residence is outside the country – to move in the wake of Labour’s election victory and subsequent budget.
Next month, a Cypriot government agency will co-host an event at the London Stock Exchange aimed at convincing wealthy individuals to move. Similarly, the Abu Dhabi Investment Office recently hosted an event at London’s Jumeirah hotel to entice affluent Britons. Italian law firm Chiomenti sponsored a Henley & Partners event titled “Non-Doms: ‘Should I Stay or Should I Go?’” to discuss relocation options.
Nick Candy, a British property developer who attended the event in Abu Dhabi, expressed concerns about a possible exodus of talent. “We will experience the greatest brain drain of talent this country has ever seen. And they won’t come back,” he told Bloomberg.
Financial advisers are reporting a wave of wealthy clients preparing to leave Britain after Labor confirmed plans to abolish the non-dom regime, which offers significant tax breaks for expats. David Lesperance, an international tax advisor, noted that he is “very busy” assisting non-dom members who are considering relocation. Tim Stovold, partner at accountancy firm Moore Kingston Smith, said more and more people were exploring options in countries such as Spain and Portugal, which offer attractive tax regimes.
Currently, non-Doms living in Britain do not have to pay local taxes on foreign income for up to 15 years. The government plans to abolish this regime in April next year and replace it with a time-limited grace period.
The special tax status is a point of contention because it mainly benefits wealthy foreigners. Supporters argue that it keeps wealthy individuals in Britain and contributes to the economy through their spending.
Prominent figures are already taking action. West Ham United chairman David Sullivan blamed a crackdown on non-doms for his decision to sell his London mansion at a loss. Charlie Mullins, founder of Pimlico Plumbers, has also put his £12 million London penthouse up for sale to avoid higher taxes, declaring he is prepared to have “no assets in Britain at all”.
According to the London School of Economics, by 2022 one in five bankers were non-doms, and four in 10 people earning £5 million or more in 2018 had claimed non-dom status at some point.