The migration patterns of high-net-worth individuals departing from the United Kingdom amid a period of global uncertainty are worth examining.
For decades, Britain was one of the world’s principal destinations for international wealth. London offered access to capital, sophisticated professional services, a respected legal system and an international business environment that few other jurisdictions could match.
But wealth is mobile.
And when wealthy individuals begin to reassess where they live, where they invest and where they structure their affairs, the question is not simply whether they are leaving one country.
The more important question is where they are going instead.
The UK Is Losing Its Wealth Magnet Status
The evidence emerging in 2022 is significant.
According to Henley & Partners’ Q2 2022 Global Citizens Report, the UK was projected to experience a net outflow of approximately 1,500 HNWIs during 2022. More significantly, the report estimated that the UK had lost approximately 12,000 more millionaires than it gained between 2017 and 2022.
This does not mean that wealthy individuals are abandoning Britain altogether.
London remains one of the world’s major financial centres, and the UK continues to attract wealthy individuals from Africa, Asia and the Middle East.
But the direction of travel matters.
For many years, Britain was a natural destination for international wealth. Increasingly, wealthy individuals have credible alternatives.
As I have argued previously, wealthy individuals are increasingly looking at investment migration as a means of hedging against changes in taxation, regulation and political risk.
The issue is therefore not whether Britain remains attractive.
It does.
The issue is whether it remains attractive enough.
The United States
The United States presents a complicated case.
America remains the world’s dominant private-wealth market and continues to attract substantial numbers of wealthy individuals. Henley & Partners projected a net inflow of approximately 1,500 HNWIs to the United States in 2022.
But the direction of US tax policy was also generating uncertainty.
The Biden administration had campaigned on increasing taxation of high-income individuals and corporations, while proposals for greater taxation of wealth and capital continued to receive political attention.
This was not a new issue. In early 2021, I noted that the Biden administration’s control of the presidency and Congress was likely to reshape US tax policy and that wealth preservation and tax structuring would become increasingly important considerations for internationally mobile individuals.
The United States therefore presents a paradox.
It remains an extraordinary place to create wealth.
But creating wealth and deciding where to preserve it are not necessarily the same decision.
For an entrepreneur or investor, access to the American market may outweigh tax considerations.
For someone who has already accumulated substantial wealth, however, the calculation can be different.
Canada
Canada has traditionally been regarded as an attractive destination for wealthy families because of its political stability, quality of life, proximity to the United States and strong institutional framework.
But the Canadian tax environment was also becoming more demanding.
In 2022, the federal government introduced the Select Luxury Items Tax, applying to certain new cars and aircraft priced above C$100,000 and boats above C$250,000. The legislation received Royal Assent in June 2022, with the tax scheduled to take effect from September 1.
This was not a conventional wealth tax.
But that distinction does not necessarily matter to someone deciding where to establish a residence.
Wealthy individuals look at the broader direction of policy.
If governments increasingly signal that luxury consumption, accumulated wealth and high-value assets are becoming targets for additional taxation, internationally mobile individuals may begin to consider other jurisdictions.
Canada therefore illustrates an important point: wealth migration is often influenced by the direction of policy rather than by a single tax measure.
Israel
Israel presents another interesting case.
It is a country with an extraordinary concentration of entrepreneurial and technological wealth, but it is not traditionally regarded as a low-tax jurisdiction for high-income individuals.
For 2022, Israel’s top marginal personal income-tax rate was 50%, with additional social-security and health contributions applying within the relevant limits.
Yet Israel was also projected to attract approximately 2,500 HNWIs in 2022, making it one of the world’s leading destinations for millionaire inflows.
That is an important reminder that tax is not everything.
People move for security, business opportunities, family considerations, culture and access to markets.
A jurisdiction can therefore attract wealth despite relatively high taxation if it offers advantages that wealthy individuals consider more important.
The lesson for Britain is obvious.
Tax competitiveness matters, but it is only one component of the proposition.
Switzerland
Switzerland represents almost the opposite model.
It combines political and institutional stability with a sophisticated wealth-management industry and a long-established reputation as a destination for international private capital.
Henley & Partners projected a net inflow of approximately 2,200 HNWIs to Switzerland in 2022, making it one of Europe’s strongest destinations for wealthy individuals. The report attributed Switzerland’s continuing appeal to its safe-haven reputation, high standard of living and position as one of the world’s leading wealth-management centres.
Switzerland also retained its expenditure-based taxation regime for qualifying foreign nationals.
This is significant because Switzerland demonstrates that a jurisdiction does not need to compete by offering the lowest possible tax rate.
It can compete by offering predictability, stability and institutional quality.
For wealthy families, those attributes can be worth more than a marginal difference in the headline rate.
Dubai
Dubai presents a very different proposition.
The UAE has developed into one of the world’s most important emerging wealth centres, combining international connectivity, infrastructure, luxury real estate, business opportunities and a highly competitive personal-tax environment.
Henley & Partners projected that approximately 4,000 millionaires would move to the UAE in 2022, making it the world’s leading destination for millionaire inflows.
The UAE’s appeal is not simply that individuals can benefit from the absence of personal income tax.
It is the combination.
A wealthy entrepreneur can establish a residence, operate an international business, access global markets and live in a jurisdiction specifically designed to accommodate internationally mobile capital and talent.
That is a powerful proposition.
And it is a proposition with which London increasingly competes.
Portugal
Portugal offers a different model again.
Its attraction lies in the combination of European Union membership, lifestyle, relatively accessible residence options and a tax regime that historically provided significant incentives to certain new residents.
The Portuguese Non-Habitual Resident regime, for example, provided qualifying individuals with special tax treatment for up to ten years. For certain qualifying high-value-added activities, employment and self-employment income could be taxed at a special 20% rate, while certain categories of foreign-source income could qualify for exemptions subject to the applicable conditions.
Portugal’s Golden Visa programme also provided another route into the country.
By 2022, the programme included investment routes involving funds, including a €500,000 investment in qualifying collective investment vehicles meeting the statutory conditions.
This distinction is important.
The Golden Visa was not simply a mechanism for buying a passport.
It was a residence programme that could provide a route towards longer-term status, with citizenship remaining subject to the applicable Portuguese nationality requirements.
For an internationally mobile HNWI, however, the value of such a programme was precisely its optionality.
It could provide an additional European residence without requiring the individual to relocate their entire economic life immediately.
Investment Migration Is Becoming Strategic
This is where the concept of investment migration becomes much more interesting.
It is no longer simply about obtaining a second passport.
For wealthy individuals, investment migration can be about tax optimisation, wealth preservation, diversification and optionality.
A person may establish residence in one jurisdiction while continuing to own businesses in another.
They may maintain investment accounts in Switzerland, property in France, companies in the United Kingdom and a residence in Portugal or Dubai.
The objective is not necessarily to abandon the original country.
It is to reduce dependence on it.
This is why investment migration increasingly needs to be considered as part of broader wealth planning rather than as a stand-alone immigration product.
The same principle applies to the structure of the investment itself. The emergence of fund-based residence options means that internationally mobile investors can increasingly combine residence planning with productive investment rather than treating migration and investment as completely separate decisions.
The UK Still Has Enormous Advantages
None of this means that Britain has suddenly become unattractive.
That would be an exaggeration.
London remains one of the world’s most important financial centres.
The UK has deep capital markets, globally recognised universities, sophisticated legal and accounting professions, a major private-equity industry and one of the world’s most developed financial-services ecosystems.
These advantages are extremely difficult to replicate.
The question is therefore not whether London will disappear as a financial centre.
It will not.
The question is whether the UK can continue to attract the people who control capital when those people have more alternatives than ever before.
That is a different question.
The Marginal Decision Matters
The UK does not have to lose every wealthy individual for the economic consequences to become significant.
The marginal decision matters.
Where does the next entrepreneur establish residence?
Where does the next family office open?
Where does the next international investor establish a base?
Where does the next generation of a wealthy family go to school?
Where does the family acquire its second home?
And ultimately, where does the family begin to regard as its primary economic home?
These decisions rarely happen overnight.
They tend to happen incrementally.
First comes the second residence.
Then perhaps a bank account.
Then investments.
Then a business structure.
Then the family office.
Eventually, tax residence.
By the time a wealthy individual formally leaves, much of the economic relationship with the original jurisdiction may already have changed.
This is why the UK’s wealth outflow should not be dismissed simply because London remains a major financial centre.
2022–2023 Will Be Important
The years 2022 and 2023 were always likely to provide an important test of these trends.
The world was emerging from COVID-19.
Governments were dealing with substantial fiscal pressures.
Inflation was accelerating.
Interest rates were beginning to rise.
The war in Ukraine had fundamentally altered the geopolitical environment.
And governments were becoming increasingly interested in taxation, transparency and the location of wealth.
For wealthy individuals, these developments reinforced the value of optionality.
The question was no longer simply:
“Where can I make money?”
It was increasingly:
“Where should I live, where should I invest and how much dependence should I have on any one government?”
That is a much more sophisticated wealth-planning question.
The Real Competition
The UK therefore faces competition on several fronts.
Switzerland competes through stability and wealth management.
Dubai competes through taxation, infrastructure and international connectivity.
Portugal competes through lifestyle, European access and residence options.
The United States competes through its enormous market and entrepreneurial ecosystem.
Canada competes through quality of life and institutional stability.
Israel competes through technology, entrepreneurship and its international community.
The competition is not symmetrical.
Each jurisdiction offers something different.
That is precisely the problem for Britain.
Historically, the UK’s advantage was that it offered almost everything: a global financial centre, strong institutions, international connectivity, professional services and an attractive environment for international capital.
It still does.
But the rest of the world has become better at offering alternatives.
The Question for Britain
The question is therefore not whether wealthy individuals are leaving the UK.
Some are.
The question is whether the UK is becoming less attractive at the margin.
The Henley data suggest that this deserves attention.
A projected net outflow of 1,500 HNWIs in 2022 is not enough to undermine London’s position as a global financial centre.
But if the trend continues, it could signal something more important: that the UK’s historical ability to combine financial sophistication with an attractive environment for international wealth is being eroded.
Britain does not need to become a low-tax jurisdiction.
Nor should it attempt to compete with Dubai simply by cutting taxes.
Its competitive advantage lies elsewhere.
It lies in the depth of its institutions.
Its legal system.
Its financial markets.
Its universities.
Its professional services.
Its global connectivity.
The challenge is to ensure that the tax and regulatory environment does not become sufficiently unattractive that wealthy individuals decide those advantages are no longer worth the cost.
The UK’s competitors do not need to defeat London.
They only need to persuade the next wealthy family that it has a better option.