Some 74,000 non-doms paid the UK government £8.9 billion in taxes in 2022/23.
Changes in inheritance tax and capping business and agricultural relief means many of these 74,000 have now left, or are planning on leaving, the UK.
Legacy
Successful entrepreneurs say they risk losing 40% of their legacy in inheritance tax when they die, undermining their hard work in creating a future for their children. It can take 10 to 15 years to build a successful start-up – the new tax regime means no-one wants to stay for at least the next four years.
Opportunity
The attack on science in the US provides the UK with a huge opportunity to attract talent.
Both French and British universities are putting out the welcome mat, but our new tax regime risks ruling out the UK as a new home for science and technology specialists we so well need.
Post-Brexit changes
Following Brexit, the UK transitioned from being a net importer to a net exporter of millionaires. According to investment migration advisers Henley & Partners, the number of wealthy individuals leaving the UK more than doubled between 2023 and 2024. As a result, the UK experienced a greater loss of affluent residents than any other country, except China.
A slow brain drain of middle-class talent has been happening since Brexit: junior doctors seeking better lives in Australia; school leavers going to US universities; doctoral science students grabbing opportunities in Singapore. The changes in inheritance tax and agricultural relief risks accelerating this exodus.
My view
Places like Dubai and Milan are doing everything they can to attract wealthy talent. Our focus on getting the sums right in the short term is a worthy exercise but, without understanding the strategic implications of today’s decisions, the UK will not have the wealth or the skills it needs to build a new economy.
Visa rules may make us look tough on immigration and inheritance tax may look like it is supporting wealth distribution but, while we struggle to produce our own talent, failing to hang on to the talent we have seems a grave mistake.
