Millionaires are leaving the UK at double the rate of last year, new data shows.
Brexit, uncertainty over non-dom status and deterioration of the country’s National Health Service since 2010 were among the top reasons given by researchers for the exodus of rich citizens.
Around 3,200 high-net-worth individuals (HNWs) are forecast to emigrate from the UK, placing it third on the global scale of countries that are losing residents with investable wealth of at least $1 million. Only China and India will lose more millionaires.
More wealthy Britons plan to quit the UK in 2023 than rich Russians will exit their troubled homeland, according to figures released by Henley Global and Partners, which helps affluent migrants to relocate.
Last year’s prediction from the London-based citizenship firm that 1,500 millionaires would exit the UK in 2022 was short by 100.
[See also: ‘The UK has scared off the rich and it needs them back’]
‘Brexit has been the main driving force for the uptake in our services,’ Henley and Partners’ Managing Partner Stuart Wakeling tells Spear’s. ‘HNWI’s are looking to claw back their EU status given the UK’s positioning now.
‘Our clients are also looking for optionality in terms of residences or citizenships as this becomes more and more relevant for the wealthy,’ Wakeling explains.
‘They are now understanding that having additional or multiple residences/citizenships is hugely important, just like being multi-banked. They don’t want an "all eggs in one basket" situation.
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‘Some clients are even looking for a more favourable tax regime in other jurisdictions and sadly, some are even just no longer happy with the country, or the way it is run.’
‘Whatever one may think about the merits of Brexit, this cohort is voting with its feet,’ Professor Trevor Williams, former Chief Economist at Lloyds Bank Commercial, writes in a commentary on the data.
‘Coupled with the policy change to remove permanent non-domiciled taxpayer status, Brexit has made the UK less hospitable and welcoming to HNWIs.’
Professor Williams tells Spear’s: ‘It is harder for high net-worth individuals to move between the UK and EU countries now that it is no longer a member.
‘That is not just the view taken by HNWIs but investors, as evidence shows that the UK’s share of inward investment into Europe has declined since it left the EU, with Germany and France benefitting.
‘Therefore, for many, the UK is not seen as welcoming an investment environment or as friendly an abode for high net-worth individuals as previously.’
[See also: London named most expensive European city for expats]
Once a magnet for wealthy Indian families thanks to low tax, strong economy and political stability, Britain is now losing Indian millionaires to Dubai and Singapore.
Sunita Singh-Dalal, a partner at law firm Hourani & Partners in the UAE, says the shift is down to several factors: ‘The recent unsettling British ‘non-dom debate’ triggered by unprecedented political volatility, coupled with rising debt, a dysfunctional healthcare system, high crime rates, and a general sense of lingering malaise.’
Where are the wealthy going?
Mediterranean destinations remain the biggest draw for millionaires leaving the UK, with Portugal, Greece and Spain the top three countries of choice for affluent expats, according to Henley’s investment migration program application figures.
Portugal, in particular, remains the top destination for migrating millionaires from several key markets - for the moment.
Most wealthy émigrés from the USA, India, South Africa and the Philippines have been rushing to set up home in the European country before its ‘golden visa’ scheme ends this summer.
[See also: What's life like working for super-rich families?]
The country took in 1,400 millionaires in 2022, but the end of the scheme, which grants residency visas - and ultimately EU citizenships - to wealthy foreign citizens, is forecast to see just 800 HNWs migrate there ahead of the program's closure in mid-July.
It is perhaps unsurprising that Malta, Spain and Greece, which are among the remaining EU countries to employ controversial ‘golden passport’ schemes, have become more popular with migrating millionaires.
Applications to Henley from wealthy US citizens looking to set up home in Malta have risen 447 per cent since 2019, while a high number of Indian and South African HNWs have also shown increased interest in living in the country this year.
Most popular countries for millionaires leaving the UK
Overall, the top three global destinations for high-net-worths remain the same as previous post-pandemic years.
Australia, last year’s second most popular spot, is now the most enticing location, with around 5,200 HNWs - 1,400 more than last year - expected to set up home Down Under in 2023.
In second place comes the UAE, which is expecting 4,500 wealthy new residents in 2023 - though last year’s inflow was higher than expected. Henley predicted a net inflow of 4,000 HNWs in 2022, but 5,200 millionaires eventually migrated there.
Most of the UAE’s newest millionaires are expected to come from India, with significant numbers joining from the UK, Russia, Lebanon, Pakistan, Turkey, Egypt, South Africa, Nigeria, Hong Kong, and China.
The figures are a huge uptick on pre-pandemic data that shows around 1,000 millionaires moved to the UAE annually.
Singapore, again in third place, has 3,200 incoming millionaires forecast for 2023, in a country of just six million.
Australia and the UAE share similar draws of good healthcare, good schools and strong economies. Singapore has a high concentration of family offices, a robust finance centre and serves as a hub for digital entrepreneurs.
Losing appeal? The US, China and India
While America still gains more millionaires than it loses, its pulling power for the rich has dwindled since Covid. The US is expecting 2,100 HNWs, mainly from Asia, in 2023. In 2019 it welcomed 10,800 millionaires.
The withdrawal is owed in part to the threat of higher taxes and the USA’s complex and expensive healthcare insurance system, according to contributors to Henley's report.
China has suffered a decade-long loss of millionaires to migration but Andrew Amoils, Head of Research at New World Wealth, says the country’s recent slowing of ‘general wealth growth’ means those losses could have a more significant impact.
India, the world’s second biggest loser of millionaires in 2022, is expected to lose fewer affluent residents this year and, says Amoils, ‘produces far more new millionaires than it loses to migration.’
Commenting on the data as a whole, McMafia author Misha Glenny says political stability, low taxes and personal freedom are key factors for countries hoping to retain millionaires.
He adds: ‘Until the Russo-Ukrainian war comes to end, both countries will continue to export HNWIs, and this will remain the single largest driver of relocation.
'But with elections due in many key Western countries in the next 18 months, other HNWIs may wait until their outcome, notably in the US and the UK, before making their choice.’
