WEXIT: Wealthy Brits Exit UK for EU Ahead of Budget
LONDON, Oct. 22, 2024 /PRNewswire/ -- Most of the approximately 9,500 high-net-worth individuals (HNWIs) forecast to leave the UK this year are expected to head to the EU, which looks set to enjoy an influx of +6,500 millionaires from Britain by the end of December. The UAE will welcome the next biggest cohort fleeing the UK (+800 HNWIs), followed by the US (+720), Australasia (+300), and the Caribbean Islands in 5th place, with +250 millionaires making a permanent move to their tropical shores.
In a follow-up to the 2024 Henley Wealth Migration Dashboard, international investment migration advisory firm Henley & Partners and New World Wealth have published their latest forecast ahead of next week's UK budget.
Based on data over the past nine months, the UK's wealth exodus or WEXIT is expected to include 85 centi-millionaires and 10 billionaires, and in an ironic reversal of Brexit fortunes, 68% are heading for Europe, with favored destinations being Italy, Malta, Greece, Portugal, Switzerland, Monaco, Cyprus, France, Spain, and the Netherlands.
As Stuart Wakeling at Henley & Partners' UK office points out, "the last two quarters have been record-breaking, with a 160% increase in applications by UK-based investors for investment migration programs over the last six months compared to the previous six months (October 2023 to March 2024). Brits have risen from 20th place on our firm's client source market list in 2018 to 4th place this year in terms of global demand."
The UK's high tax rates and concerns about additional tax hikes that could be announced in Labour's first budget in 14 years, are highlighted as being among the main reasons. New World Wealth's Head of Research, Andrew Amoils, says the UK's capital gains tax and estate duty rates are among the highest in the world. "What many politicians and academics in the UK fail to understand is that there are several high-income countries globally that don't levy capital gains tax, including the likes of Singapore, the UAE, and even New Zealand. There is also a much longer list of countries that don't charge estate duty, including high-growth markets such as Canada, Australia, and Malta."
Peter Ferrigno, Director of Tax Services at Henley & Partners, says by promising not to increase income tax or VAT, the new government has limited its ability to raise new revenues. "Inheritance tax is at 40% rate and applies to estates above GBP 325,000, which is very high by global standards. Where the assets are still under the control of the original owner, we expect increasing restrictions on whether the transfer is effective for tax purposes or not. As regards the 'carried interest' loophole, the latest thinking is that taxing it at the full rate of income tax would drive a large chunk of the industry away, so we expect some change, but not all the way."
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