As summer turns into autumn, we’re speaking to a growing number of HNWIs who are considering a move overseas. Important to note that these are not just the non-doms who will be impacted by the proposed changes to the remittance basis, but UK entrepreneurs are also increasingly looking to move abroad.

It’s interesting to read that this is not just our experience here at Sanctoras, and that HNWIs and UHNWIs are indeed increasingly upping sticks and heading elsewhere. The Private Wealth Migration Report from Henley Global asserts that 2024 will be the most significant year ever for HNWI relocations, with 128,000 moves estimated to be made by the end of December.

The UK is not leading the way here, with China currently seeing the greatest outflow of HNWIs, with an estimated 15,200 individuals leaving China in 2024 (the UK is estimated to have c9,500 departures).

Perhaps unsurprisingly, the UAE is estimated to be the greatest beneficiary of these moves, with c6,700 individuals predicted to move to the UAE this year. With relatively stable weather, and a favourable tax regime, this inflow is likely to only grow in future years.

As Rachel Reeves finalises the announcements and proposals in advance of the Budget on 30 October, the Adam Smith Institute reports that up to 20% of millionaires may leave the UK by 2028. And as noted above, it is not just the non-doms who we are seeing leave the UK. The Chancellor needs to tread a little carefully to ensure that any announcements do not end up costing the UK tax revenue, rather than increasing it.

It’s not just the UK that is looking at different methods of raising tax revenue in a globally mobile world, with a number of governments looking at a variety of different proposals to attract and retain individuals. Portugal has recently proposed a 10-year tax regime to attract and retain young people with up to 100% exemption from tax in the first year of employment in Portugal. This is likely to be a common theme in the coming years.

Likely to be less successful, a discussion around a global wealth tax is ongoing, however progress is difficult, and with the USA reportedly not onboard, it is hard to envisage a wealth tax being introduced on a global scale. Talk certainly seems to have cooled in the UK of a wealth tax, with implementation, reporting and collection likely to be difficult.

Whilst tax is certainly a consideration for some of those relocating, globally this is not always the case, with South Africa, India, Russia and Brazil also seeing a significant emigration, driven by a variety of political, security and quality of life factors. Lifestyle is increasingly becoming a key reason for relocating from the UK to the UAE, with relatively stable (warm!) weather in the UAE, in particular, a significant attraction.

When considering relocating, there are a number of factors that ought to be considered with your advisors, including:

• If required, how easy will it be to unwind any structures established, or investments made if the move needs to be reversed?
• Are your family members relocating with you, or will they be remaining behind?
• Are you willing to minimise time spent in your former homeland, at least in the first few years?
• Are you prepared to keep meticulous records of your activities to evidence your location (if required) for the tax authorities? 
• Is your place of planned relocation somewhere that you want to live? Whilst tax may be a significant factor, it is important that a match for your lifestyle is sought too. Would you prefer the lifestyle in, for example, Jersey or the UAE?

Whilst there are a host of non-tax factors that should be considered, from a UK tax perspective, considerations will include:

• CGT - The timing of the disposal of assets to crystallise gains, and whether they would be subject to tax in the UK or another jurisdiction
• IHT - Whether you are within the scope of UK IHT, and will remain within the scope before your arrival / after your departure, and whether there are any reliefs available;
• Double Taxation Treaties - Whether your destination country has a tax treaty with the UK, which would deal with any residual income or gains in the UK (or vice versa, if you are relocating to the UK).

As an advisory firm with a multi-national footprint ourselves, and clients based around the globe, Sanctoras is well positioned to support you and your family in considering a move. By helping you to understand the financial implications of your plans and supporting you to futureproof your affairs, we enable you to focus on living the life you want to lead – wherever that may be.

If you would like to speak to a specialist about your own move abroad, please contact me via hello@sanctoras.com