LONDON, UK – David Lesperance, a Canadian wealth advisor based in Poland, works day and night for one of his clients in the UK.
John*, who asked not to be named, is planning to move to Ireland’s capital, Dublin, ahead of November 26, when Prime Minister Rachel Reeves is due to table the Budget, a statement setting out the Labor government’s financial plans for the year ahead.
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John, who has set up a company worth around £70 million (about $92 million) and plans to sell it soon, wants to avoid a hefty capital gains tax bill.
Since my children are college students, they can also raise their sticks. He hopes to be exempt from Irish taxes as well, taking advantage of the Republic of Ireland’s non-resident, or “non-Dom”, tax system.
Mr L’Esperance, which has helped him move his assets overseas, said: “We are moving quickly to prepare for his immediate departure to Ireland.” “With tax increases looming, the cost of early retirement is a rounding error.”
John is not alone.
Footballer Rio Ferdinand recently moved to Dubai using taxes as a driving factor, while Egyptian billionaire and Aston Villa co-owner Nassef Sawiris, who has relocated from the UK to Italy and the United Arab Emirates, told the Financial Times earlier this year that everyone in his “circle” was considering moving.
Harman Narula, the 37-year-old British-Indian founder of technology company Improbable, announced this month that he was fleeing to Dubai. Worth around 700 million pounds (about $920 million), he is said to be Britain’s richest young entrepreneur. His flight was reportedly due to the Labor government’s plans to impose an exit tax on wealthy people leaving the UK.
Although the proposal appears to have been rejected, the overall business environment is becoming increasingly unpredictable for entrepreneurs, Narula and several others say.
“There is worrying evidence that some entrepreneurs are leaving the UK,” said a recent open letter to Mr Reeves, signed by more than a dozen wealthy executives, including Nick Wheeler, founder and chairman of menswear retailer Charles Tyrwhitt, and jewelery designer Anoushka Ducasse.
“The government needs to carefully consider the cumulative impact of these policies on entrepreneurs when preparing this year’s Budget,” the letter warns.
Once the Budget is passed, all eyes will be on changes to the tax system, an issue that affects everyone in the UK. Speculation about tax changes to wealth, income and pensions has repeatedly made headlines in recent months.
Rumors of the super-rich abandoning Britain have been swirling for even longer, starting with the mere prospect of a Labor government last year. Since Keir Starmer’s government was elected in July last year, various media outlets have highlighted instances that suggest Labor is draining wealth.
Labour’s first budget in October last year infuriated some high-income earners in Britain who argued they were already being taxed too much.
“Last year’s budget measures, including capital gains tax, entrepreneur relief and changes to employer national insurance, increased costs for many entrepreneurs and businesses,” said a recent open letter to Reeves from wealthy executives.
The changes came after the Conservatives abolished the non-Dom system, a status that allowed overseas residents to avoid paying taxes in the UK.
But experts are warning of a possible flight of the wealthy.
There is no official data on how many rich people will leave as a result of Labour’s tax changes.
“The latest tax data for wealthy people with non-dom status released by HMRC shows that the number of non-doms leaving the UK is in line with or below official forecasts,” said Marc Bou Mansour, an advocate at the Tax Justice Network.
He said claims that recent revenue-enhancing tax reforms had caused a mass exodus were false and part of a wider rhetoric that was detrimental to the UK’s fiscal and economic health.
“Talking about whether taxing the super-rich will move them can distract from the discussion about the economic and democratic consequences of not taxing extreme wealth,” he said.
Mansour pointed to a 2024 study by the London School of Economics that interviewed a large number of wealthy people. The study found that the most important factors supporting their reluctance to migrate were their attachment to the capital’s cultural infrastructure, private health services and schools, and their ability to maintain social connections.
“There is a lot of strong evidence that the ultra-rich don’t just choose to migrate to reduce their taxes,” Mansour said.
Behind a number of articles predicting an exodus of wealthy people was a report by passport advisory firm Henley & Partners.
However, the report was found to be based on flawed methodology and was later revised.
Still, L’Esperance said he had worked with many clients who had left the UK since Labor came to power.
He argued that although this group is not necessarily large in number, it accounts for a high proportion of the total tax revenue collected by the government.
“Non-Kingdom tax payers are around £220,000 ($289,000) a year, which is about six to seven times the UK average,” he said. “They are super contributors that should be protected,” he said, adding that otherwise “tax collections would actually go down each year as these people left the country.”
Some of his clients have chosen to relocate to Milan or Dubai.
“As one of my clients said, ‘London is nice, but it’s not that great,'” he says.
But Michelle White, head of private practice at UK wealth management firm Rathbones, said clients were moving internationally and could leave, but the vast majority were staying put for now.
“We haven’t seen anything like that since some of the articles started coming out saying the floodgates were opening,” she said.
She argued that the UK’s schools, legal system and business environment remained the driving factors.
Retirees are typically people who own business ventures or property overseas that they can easily relocate, or who are looking to sell their business in the next two years or so and don’t want to pay capital gains tax on the sale.
Some people receive large payments from private equity or hedge funds and want to avoid paying income taxes.
“That means they spend less time here and more time elsewhere to avoid paying UK tax on that sale,” Mr White said.
The majority of her clients ultimately decide to remain in the UK to support their families, reducing their tax bill through smart planning.
“I tell people to look at the next 50 years and plan their taxes around that. People take the long view.
“Taxes are important, but quality of life and how you actually want to live as a family often takes precedence over the tax aspect.”
