UK ‘no longer seen as attractive jurisdiction' for wealth

The UK is no longer seen as an attractive jurisdiction for wealth, with a significant number of high net worth individuals (HNWI) having left the country amid changes to tax rules, insurance-based wealth solutions provider Utmost has stated.

The Sunday Times Rich List showed that one in six people who appeared on the list two years ago were no longer on the list in 2026, while nearly a third of the UK citizens that appeared on the main list no longer lived on the British mainland.

Following the publication of the list, Utmost global wealth specialist, Marc Acheson, said the UK was “driving wealth creators away”.

“Ever since the abolition of the non-dom regime and the inclusion of previously excluded property trusts within the scope of IHT announced at the Autumn 2024 Budget, wealthy non-UK nationals have been leaving in significant numbers,” he continued.

“The UK is now experiencing a second wave of departures comprising long-term nationals, entrepreneurs and business owners, driven primarily by the application of inheritance tax to family businesses.

“Other planned measures, including unused pension pots due to be brought within the scope of inheritance tax from April 2027, alongside the ‘Mansion Tax’ are also damaging the UK’s appeal among this group.”

Acheson warned that the UK economy could not afford to lose these HNWIs, as they were the largest contributors to the tax base and it would be hard to replace them.

Katten Muchin Rosenman LLP tax partner, Daniel Lewin, echoed these concerns, stating that the list highlighted a significant exodus of the wealthy and very wealthy.

“The systematic dismantling of the non-dom regime, ironically started by the Tories, eventually came home to roost,” he stated.

“The final straw – or perhaps death knell - for many of the super-rich living in the UK was the imposition of world-wide inheritance tax on non-UK assets after ten years’ residency in the UK. Forty per cent tax is a huge amount.”

Lewin described the list as “painful reading”, with almost a third of UK citizens who were previously on the list no longer living in the UK or not having the UK as their main residence.

He wanted that the problem ran deeper than the Rich List, as a significant number of successful asset managers, entrepreneurs and investors who came to the UK have decided to relocate to jurisdictions with more attractive tax regimes.

"The new foreign income and gains regime introduced to ‘replace’ the non-dom regime and exempting non-UK income and gains from UK tax altogether works well, but is limited to four years from arrival – more than enough time for a secondment or stint in the UK, but no match for the loss of non-dom status and certainly not an incentive for foreign families to grow proper roots in the UK,” Lewin added.

“Perhaps the most striking aspect of the Rich List is that it proves that the predictions about wealthy foreigners (and UK nationals) leaving the UK for other shores were not hype; they are reality.

“That said, not all is bleak - London remains Europe’s financial centre, is a highly attractive city to live in with exceptional culture, restaurants and diversity. Tax is not everything, but while the government has been promising growth, the evidence points the other way, at least for non-doms.”

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