CNBC: Britain's rich want to leave in droves if tax regime changes

Monaco, Italy, Switzerland or Dubai are just a few destinations that are trying to lure the very rich from Great Britain, where changes to the tax regime are being prepared, writes CNBC.

Almost two-thirds (63%) of large investors said they planned to leave the UK within two years or "shortly" if the Labor government went ahead with its plans to scrap, according to research by Oxford Economics. of tax concessions from the colonial period, while 67% stated that if these concessions had not existed they would not have emigrated to Great Britain, the American publication also writes.

The island's so-called "non-dom regime" is a 200-year-old tax rule that allows people living in the UK but domiciled elsewhere to avoid paying tax on foreign income and capital gains for up to 15 years. Last year an estimated 74,000 people enjoyed this status, up from 68,900 in 2022.

Last month, Labor unveiled plans to scrap the rule as part of its election manifesto pledge, reinforcing previous Tory government proposals to phase out the tax regime over time. UK Prime Minister Keir Starmer has also promised measures to improve fiscal fairness and support public finances, with further announcements expected in the budget statement on 30 October.

• UK foreign investors claim tax changes "will put incomes at risk for generations'

Finance Minister Rachel Reeves said scrapping the program could generate 2.6 billion pounds ($3.45 billion) over the next government's financial year.However, research by Oxford Economics, which was carried out earlier this month in collaboration with lobby group Foreign Investors for Britain, estimates the changes will cost taxpayers around £1 billion by 2029/30.

On the other hand, Macleod-Miller, CEO of the organization of Foreign Investors for Great Britain, characterizes the approach as "a dangerous moment", which "will endanger incomes for generations".

Under the proposals, the concept of "domicile" will be scrapped and replaced with a residence-based system, while the number of years in which money earned abroad is not taxed in the UK will be reduced from 15 to four. Individuals will also have to pay inheritance tax after ten years of residence in the UK, which would continue for ten years after leaving the country.

Macleod-Miller, who launched the lobby group aimed at responding to the proposals, says the changes would hinder wealth creation and is calling for a tiered tax regime, according to CNBC.

• Switzerland, Monaco, Italy, Greece, Malta, Dubai, Caribbean and Bahamas among attractive destinations for Britain's wealthy

As Britain plans to tighten its tax regime, other countries are easing them to attract wealthy investors. Switzerland, Monaco, Italy, Greece, Malta, Dubai, the Caribbean and the Bahamas are among the destinations proving most attractive to the wealthy, according to industry experts consulted by CNBC.

"Wealthy investors have a lot of options and a lot of jurisdictions are struggling to attract them," Helena Moyas de Forton, managing director and Christie's International Real Estate, told CNBC.

According to the expert, whose team advises clients on international relocation options, Labour's plans are the latest in a string of political moves that have shaken the UK's reputation as a haven for the world's wealthy in recent years. A record number of millionaires are expected to leave Britain this year after July's general election, adding to a post-Brexit outflow, according to a June report by consultancy Henley & Partners. Estimates are that Britain will have a net loss of 9,500 millionaires this year, compared to 4,200 last year.