Once regarded as a magnet for the world’s wealthy, the UK now finds itself cast in a different light. In recent months, headlines have been dominated by talk of an exodus: non-doms packing their bags, investors eyeing foreign jurisdictions and experts warning of capital flight as the Labour government couples its abolition of the non-dom regime with a raft of reforms that many in the private client world see as more political than pragmatic.
One group of people with a useful vantage point of recent shifts and their likely implications is the cadre of top tax experts who advise the wealthy clients at the centre of much of the debate. To shed light on the issues, the Spear’s Research Unit canvassed around 60 of the very best in the UK.
The picture that emerges from our survey is stark: confidence in the UK government’s approach is in tatters. Nearly all (96.7 per cent) of our survey respondents described recent changes to the tax regime as either ‘extremely negative’ or ‘negative’ for the economy and the exchequer. ‘At a time when certainty and caution was needed, [the Labour government] took steps to unravel a system which needed reform, but didn’t give it the due consideration and care it needed,’ says one adviser, speaking to Spear’s anonymously. ‘Clients felt ostracised by the government and we have poorer legislation off the back of it.’
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The abolition of the non-dom regime, originally a Conservative policy announced by Jeremy Hunt during the previous Parliament, was repeatedly cited as the primary source of discontent. Simon Gibb, partner at Trowers & Hamlins, characterises the change as ‘anti-investment and anti-entrepreneurial’.
Frustration extends beyond policy itself to the way reforms were introduced. Advisers highlighted a lack of consultation and a disregard for signals from the private client market, contributing to a loss of trust in the government. ‘Rather than modernising the regime, Labour has dismantled it without a clearly defined replacement, leaving internationally mobile families in limbo,’ says Stacy Lake, partner and head of international private wealth at Bolt Burdon. The net result seems to be a perception that the UK is no longer welcoming to wealth-holders.
The flight of the non-doms
When asked how many former non-doms they expect to have moved their tax residency from the UK when figures are released by the government in 2027, the majority of respondents (58 per cent) said they expected between a quarter and half of the 61,000 or so affected. However, a significant minority (25 per cent) believed the number released in 2027 would be lower. Relocation, advisers note, tends to be a slow and considered affair, rather than an immediate reaction. Moving one’s tax residency – not to say anything of one’s personal affairs and family life – is a complex process and many wealthy individuals continue to weigh the UK’s legal and broader commercial infrastructure in their calculations.
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Liechtenstein-based offshore trusts expert John Bender explains that Britain still offers a comparatively efficient environment for running a business, particularly when measured against continental Europe.
And, despite the recent narrative, many of our survey respondents emphasised that the country already holds significant advantages. The UK is ‘perfectly positioned globally in terms of time zone and in its place in Europe,’ Ben Rosen of London law firm Quastels says. ‘Along with English as the global language, its moderate climate, its world-class culture and arts scene, and its business infrastructure, the UK is a global leader in almost every category. We ought to do what we can to retain this position.’
Education remains an important strength too, particularly for families, with high-quality schools and universities continuing to make the UK an attractive base.
Ultras in flux
That said, advisers stressed that the concern is less about the number of people leaving and more about the concentration of wealth that could depart. Individuals with fortunes exceeding £100 million, they emphasised, are more likely to seek more favourable jurisdictions, taking not only their wealth but also business opportunities, talent and influence with them. As Lara Mardell of Edwin Coe said: ‘It’s not just about people leaving the UK – the changes are likely to put people off coming to the UK in the first place.’
However, one adviser highlighted a counter-current: American individuals are relocating to the UK, possibly influenced by the political and economic climate in the US. ‘Hopefully this trend continues to help balance movement of talent and taxpayers,’ they noted, preferring to comment anonymously.
Calls for a wealth tax have sparked unease among advisers and clients alike. An overwhelming majority (88.1 per cent) of respondents said that levying a wealth tax would not be in the best interests of the UK, its citizens or its public finances – to say nothing of their clients.
Many advisers argued that such a measure would be difficult to enforce, diverting HMRC resources from ensuring existing taxes are correctly paid, while also amounting to double taxation on income and gains. ‘You need to generate income and gains, which are already taxed, to pay the tax on the asset,’ noted Spear’s Top Flight tax adviser Mark Davies.
Several advisers argued that the UK could remain competitive even with higher taxation, provided it delivered tangible benefits. One adviser drew a comparison with Denmark, where residents accept higher taxes because they see clear returns: ‘In Denmark, the elderly pay a small contribution towards the cost of their care and the services are excellent. As such, the general consensus is that the tax funds are being spent well. However, in the UK, it feels like we are taxed heavily and not seeing any benefit from it.’
The survey results suggest a sharp contrast between perceptions of the value of wealthy taxpayers as actors in the UK economy, with advisers seeing them as significantly more beneficial to the public good than the government appears to. A striking 91.5 per cent of advisers said the UK would benefit if its tax regime became more favourable to wealthy individuals and entrepreneurs currently based abroad.
The challenge for London, experts note, is not merely to retain existing wealth, but to reassure future generations that it remains a place where talent, capital and ambition are valued.
As Robert Brodrick of Payne Hicks Beach put it: ‘The tax [changes] send the message that the UK is not the place for wealthy people, that we punish success and aspiration rather than nurture it.’
For now, the UK is at a crossroads. The direction of its next turn will be crucial.
