The UK is increasingly becoming a no-go zone for millionaires as record numbers of people leave the country due to a “perfect storm of Brexit fallout, political uncertainty and a controversial overhaul of the tax regime for those without a permanent residence”.
Latest news from Henley & Partners Private Capital Migration Report predicts that 9,500 millionaires will leave the UK by 2024, more than double last year’s figure. The country is second only to China in the number of millionaires who will leave its shores this year.
The United Arab Emirates continues to lure millionaires from other countries, luring them with ultra-attractive features such as golden visas, zero income tax and a focus on flashy luxury. This year there will be 6,700 millionaires in the region.
Year of Democracy
It’s no surprise that 2024 is likely to be a record year for the global migration of millionaires. More than two billion people will go to the polls this year, the largest number on record, and that will have ramifications.
At the same time, according to World Economic Forumcreating the need to move money around the world.
The UK public will go to the polls in July to elect a new government, with the centre-left opposition Labor Party the overwhelming favorite to replace the ruling Conservative Party.
The party is expected to crack down on ways the wealthy accumulate wealth, including tax evasion loopholes and the controversial “non-resident” status. The government also plans to increase VAT on private school fees.
Conservatives also plan to begin a crackdown on homelessness, which opponents say is a mistake.
“While this may have been smart politics, it was a red flag for the global wealthy elite, who saw that the British center-right party was suddenly prepared to play fast and loose with the rules affecting them for short-term political gain,” said Alec Marsh. editor of Spear’s wealth management magazine.
The US is preparing for its own political shift, with Donald Trump set to face President Joe Biden later this year.
While Trump is likely to prove broadly popular among the wealthy thanks to his liberal fiscal stance, others have not shaken off memories of his last tenure and legal troubles after leaving.
Talking to Luck In March, wealthy Americans detailed how they were eyeing European real estate ahead of the November election as a possible escape route from another Trump presidency.
Inquiries about passports and pathways to citizenship have surged in the past year as U.S. citizens become concerned about the political situation at home, advisers said Luck.
However, Henley said the U.S. is expected to create about 3,800 millionaires this year. Since 2013, the number of millionaires in the country has increased by 62%.
In France, the threat of a showdown between the political far left and far right has the wealthy wary of aggressive tax hikes or a decline in confidence in its public markets. They too can seek asylum abroad.
British exodus
For the UK, the latest record exodus of millionaires is not an anomaly based on the political context, but is part of a long-standing trend of the rich fleeing the country.
There are currently 602,500 millionaires in the UK, but the country has lost 8% of its millionaire population since 2013, according to Henley.
“Unfortunately, since the Brexit referendum in 2016, the UK has experienced a Midas reverse, struggling to maintain its place at the top table for attracting global wealth,” Spears Marsh said.
“During this time, sterling has underperformed, but not as much as the country’s main financial index, the FTSE 100, which until earlier this year was as lackluster as the UK economy as a whole.”