The allure of relocating to a country with a more favourable tax regime is undeniable for ultra-high-net-worth (UHNW) non-dom families. This is particularly true in the current political landscape, with Labour chancellor Rachel Reeves poised to scrap the existing non-dom regime.
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Italy, with its delectable cuisine, stunning landscapes, high standard of living, pleasant climate, and prestigious international schools, stands out as a particularly attractive destination, and has garnered interest from UHNWs on the move.
However, having navigated an international relocation with my children, moving from Paris to London and back, I can attest that financial benefits should not be the sole consideration.
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The broader impact on the family unit must be carefully evaluated to avoid costly mistakes and family discord.
Family first
Before making any relocation decisions, it is crucial to consider the needs and desires of every family member.
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Does the spouse want to move, and will the relocation support their professional and personal growth? Are the children thriving in their current schools, or do they face critical exams? Would boarding school in the UK be a better option than starting anew abroad? If the children are already attending an international school with branches overseas, transitioning might be smoother. But their wishes and the potential for new opportunities must also be weighed.
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Avoid the distress of a failed move
There’s nothing more disheartening than uprooting the entire family only to realise that the relocation isn’t working out. Leaving behind prized school places and burgeoning careers can lead to regret and tension. Staggered moves, where one parent stays behind temporarily, can sometimes help, but moving together as a family unit is often simpler and more cohesive. Financial considerations, such as the costs of maintaining properties in both locations, must also be factored in.
Pre-emptive advice is key
It’s not uncommon for one spouse to seek discreet advice when a move is on the horizon. If there are already doubts about the relationship’s longevity, the stress of relocation can exacerbate these issues. Seeking holistic advice from experts early on ensures that all aspects of the move, including potential legal disputes, are considered.
Handling disputes
When parents can’t agree on relocating abroad, and non-court dispute resolution fails, arbitration or court applications may become necessary. These proceedings, where the children’s best interests are paramount, can be contentious and emotionally draining. Often, one party receives advice well in advance to strengthen their position, leaving the left-behind spouse feeling isolated, especially if their career keeps them in the UK. The limited time they get with their children, typically weekends and holidays, can be heart-wrenching.
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The emotional toll of relocating
While high-net-worth families are accustomed to mobility for tax efficiency, the emotional impact on children and one parent who may have established deep roots in the UK should not be underestimated. Moving away from what is now considered ‘home’ can be distressing, and the implications of such a decision should be thoroughly explored.
Take action now
With potential changes to the tax status of non-doms and their families looming, HNWs should seek specialist family law and tax advice immediately. Early planning allows for a comprehensive evaluation of all options and their implications for each family member. A well-considered approach ensures that financial benefits do not come at the cost of family harmony and personal well-being.
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Sarah Williams is head of modern family law at Payne Hicks Beach.
