Record number of UK millionaires fleeing country, headed for tax-friendly UAE

KUALA LUMPUR: The UK could see a record number of millionaires leave the country as political turmoil and the prospect of higher taxes under a potential Labour government diminish the country's allure for the wealthy.

An estimated 9,500 people with at least US$1 million in liquid, investable assets are expected to leave the UK, with many looking to move to the United Arab Emirates (UAE). This marks more than twice the number who left in 2023, according to preliminary estimates from a report by migration advisors Henley & Partners released yesterday (June 18).

"A total of 9,500 millionaires are expected to leave in 2024 — second only to China worldwide, and more than double the 4,200 who left the country last year, which was itself record-breaking following the exodus of 1,600 high-net-worth individuals (HNWIs) in 2022," Henley & Partners said in a statement.

"For the third year running, the United Arab Emirates (UAE) looks set to take first place as the world's leading wealth magnet, with a record-breaking 6,700 wealthy migrants expected to make the Emirates home by the end of the year, significantly boosted by large inflows from the UK and Europe.

"With its zero income tax, golden visas, luxury lifestyle, and strategic location, the UAE has entrenched itself as the world's number one destination for migrating millionaires and is poised to welcome a record net inflow of 6,700 this year alone. With consistently high inflows from India, the wider Middle East region, Russia, and Africa, the anticipated influx of larger numbers of Brits and Europeans looks set to see the Emirates attract nearly twice as many millionaires as its nearest rival, the US, which is projected to benefit from a net inflow of 3,800 millionaires in 2024," the statement read.

The exodus of millionaires triggered by economic and political turmoil, commented a think tank director, Dr Hannah White, risks being accelerated by further unwelcome policy decisions ahead of the election.

"On top of the 40 per cent duty already imposed on estates above a £325,000 (RM1.95 million) threshold, the Conservative government has adopted the thrust of the Labour opposition's policy of ending the UK's non-dom (non-domicile) tax regime from 2025. And for those educating their children in the UK's well-regarded private school sector, Labour's commitment to remove their exemption from 20 per cent VAT (value-added tax) is a further unwelcome development," the Director and CEO for the Institute for Government said.

The report draws on data from 150,000 high-net-worth individuals (HNWIs) tracked by the investment firm New World Wealth. This firm includes only those who spend over half the year in their new country, primarily focusing on company founders, chairs, CEOs, presidents, directors, and managing partners.

The ongoing departure of millionaires from the UK — 16,500 left between 2017 and 2023 — is part of a broader trend of increasing global wealth migration. According to the Henley Private Wealth Migration report, 128,000 millionaires are expected to relocate this year, surpassing last year's record by 8,000.

"As the world grapples with a perfect storm of geopolitical tensions, economic uncertainty, and social upheaval, millionaires are voting with their feet in record numbers," Dominic Volek, head of private clients at Henley & Partners, said in a press release.

This loss for the UK means it is second only to China, where an anticipated net exit of 15,200 HNWIs this year (compared to 13,800 in 2023) is expected.

Following this trend is South Korea, which is also expected to see a rise with a forecast loss of 1,200 millionaires (compared to 800 in 2023).

Meanwhile, India, the report added, has stemmed its wealth exodus, dropping down to 3rd place after the UK with just 4,300 millionaires projected to leave the country in 2024 (compared to 5,100 last year).

Similarly, Russia will see fewer millionaires leaving the country this year compared to previous years, with only 1,000 projected to relocate (compared to 8,500 in 2022 and 2,800 in 2023).

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