Tax: Is It the New Brexit?
“The UK didn’t just scrap a tax regime, it dismantled a tacit contract with the world’s globally mobile elite.”
“The UK didn’t just scrap a tax regime, it dismantled a tacit contract with the world’s globally mobile elite.”
“The UK didn’t just scrap a tax regime, it dismantled a tacit contract with the world’s globally mobile elite.”
Introduction
For decades, the UK offered a peculiar kind of promise to the world’s wealthy: come live here, invest in our economy, and as long as you keep your money offshore, we won’t tax it. It was the infamous non-dom regime, a system both admired and maligned, yet effective in attracting capital, talent, and trust.
Now, that promise has been revoked, and the consequences are becoming very real.
A Policy Born of Politics, Not Planning
Behind the abolition of the non-dom regime lies what many experts interpret as a politically motivated manoeuver, rather than a considered economic reform. The government’s desire to project fairness and simplicity in the tax system may resonate with domestic voters, but it sends a very different message to wealthy internationally mobile individuals and institutions.
Evidence of capital flight is already surfacing. Wealth managers report rising inquiries from clients seeking to leave the UK, restructure assets, or establish roots elsewhere. With quiet conversations already circulating in Westminster about potentially revisiting some of the harsher aspects, particularly the ten-year inheritance tax tail, it would seem that policymakers are potentially anticipating some backlash and possible damage control ahead.
Losing Ground to Global Competitors
In today’s increasingly competitive global tax landscape, the UK is beginning to look like an outlier for the wrong reasons. Jurisdictions like Dubai, with its zero income tax and fast-track residency schemes, are positioning themselves as havens for capital. Singapore continues to attract with its transparency, low tax rates and consistent policy environment. Switzerland, although no longer as secretive as in decades past, still offers its forfait regime for wealthy foreigners, a system rooted in predictability.
By comparison, the UK is beginning to look unstable. The erosion of the non-dom regime, combined with the introduction of a ten-year inheritance tax tail and ongoing regulatory shifts, has significantly weakened the country’s standing in the global competition for capital. Wealth planners note that the UK is rapidly losing its appeal as a long-term base for wealth structuring.
Moreover, unpredictability is itself a form of tax. For high-net-worth individuals who prioritise clarity and consistency, the risk of further reactive policy changes creates a disincentive to commit. Once trust in a legal and fiscal framework is lost, the reputational damage can outweigh the technicalities of any single reform.
The Economic Ripple Effect
This isn’t just about the ultra-wealthy swapping Mayfair for Monte Carlo or moving family trusts to Geneva. The impact is rippling through the broader UK economy, from high-end property markets and private schools to luxury retailers, art dealers, venture capital firms and the wider network of legal and financial advisors that supports global wealth.
The reputational risk is mounting. Once a jurisdiction is perceived as hostile to wealth, regaining the confidence of internationally mobile families becomes a long and uncertain process. It's becoming a question of long-term trust in the system.
High-value real estate transactions, often a bellwether of international investor sentiment, are beginning to slow. At the same time, private equity and venture firms, which have traditionally used the UK as a base for operations and capital raising, are reassessing their presence. The danger is not only the departure of individual clients, but a compounding cycle: reduced capital inflows lead to greater fiscal strain, which in turn can trigger further tax reforms, deepening the exodus.
The Shift in Structures
Behind the scenes, a planning boom is underway. Wealth structuring professionals are seeing a sharp rise in demand for family investment companies, trust arrangements, asset segregation and minority interest discounting - strategies designed to preserve capital amid a less hospitable tax environment. Intergenerational gifting, previously treated as a longer-term consideration, is now being accelerated as families seek to get ahead of further reforms.
In private equity and hedge fund circles, the restructuring is more than symbolic. Fund managers are actively redomiciling general partner and carried interest structures to jurisdictions such as Luxembourg and the Channel Islands. For many, personal relocation is also on the table, driven by the need for long-term stability and favorable treatment of investment income.
Entrepreneurs, particularly those nearing a business exit, are also responding decisively. A growing number are willing to become non-UK residents for multiple years to reduce their exposure to capital gains and inheritance tax. The overall tone of planning has shifted from cautious and speculative to urgent and preemptive. What was once a set of isolated responses is now shaping into a broader repositioning of how and where wealth is managed.
‘The UK is Now Complicated’
Among family offices and international investors, the shift in sentiment is now undeniable. What was once considered a cornerstone jurisdiction for wealth management, legal domicile and philanthropic infrastructure is increasingly being viewed through a lens of caution and complexity. The UK is now more often described in advisory circles as complicated and volatile - a marked change from just two years ago.
Contingency planning has moved from the margins to the mainstream. Family offices are actively exploring alternative jurisdictions not only for tax efficiency but also to future-proof their legacy strategies against further policy unpredictability. In many cases, capital is not being withdrawn outright, but it is no longer being reinvested with confidence.
This climate of uncertainty is also reaching areas previously considered immune to fiscal or political turbulence, including philanthropy and ESG initiatives. Some wealth holders are choosing to establish charitable foundations offshore to avoid new compliance burdens, while others are scaling back or redirecting impact investments that were previously anchored in UK-based causes. As regulatory friction increases, long-term commitment begins to erode.
A Glimmer of What Could Be
The question now is not whether the UK can regain confidence, but how quickly it can act to prevent further erosion. Advisors on the frontlines are calling for a pause in the ongoing legislative churn and advocating for a more durable, globally competitive framework to attract and retain international wealth.
Their recommendations are pragmatic. Many support extending the foreign income and gains exemption for new arrivals from four to ten years, potentially introducing a graduated charge after the fourth year to balance flexibility with revenue needs. Others argue for repealing the ten-year inheritance tax tail and reinstating the previous three-year rule, which aligned more closely with international norms. Most critically, there is a broad call for policy stability, a break from short-term tinkering in favor of a predictable environment where long-term planning can once again take root.
Progressive taxation and global competitiveness are not mutually exclusive. But they require a clear, consistent approach is something the UK currently lacks, just when clarity is most needed.
Conclusion
The UK didn’t just scrap a tax regime, it dismantled a tacit contract with the world’s globally mobile elite. That unwritten understanding promised stability, clarity, and respect for long-term planning in exchange for investment and presence. Without a credible path to restoring that trust, Britain risks more than just capital outflows. It stands to lose its status as a premier global wealth hub in an era where mobility is not merely a privilege, but a defining expectation.
About the Author
Anna Warren is a Tax Director at Bentley Reid, where she advises high-net-worth individuals, trustees, and family offices on tax and estate planning. A Chartered Accountant and Chartered Tax Adviser with over 17 years of international experience, Anna integrates technical expertise with a holistic approach to wealth management. Prior to joining Bentley Reid, she worked in KPMG’s private client team in London and later advised a prominent UK family office on multi-generational structuring. She is currently based in Hong Kong.
Introduction
For decades, the UK offered a peculiar kind of promise to the world’s wealthy: come live here, invest in our economy, and as long as you keep your money offshore, we won’t tax it. It was the infamous non-dom regime, a system both admired and maligned, yet effective in attracting capital, talent, and trust.
Now, that promise has been revoked, and the consequences are becoming very real.
A Policy Born of Politics, Not Planning
Behind the abolition of the non-dom regime lies what many experts interpret as a politically motivated manoeuver, rather than a considered economic reform. The government’s desire to project fairness and simplicity in the tax system may resonate with domestic voters, but it sends a very different message to wealthy internationally mobile individuals and institutions.
Evidence of capital flight is already surfacing. Wealth managers report rising inquiries from clients seeking to leave the UK, restructure assets, or establish roots elsewhere. With quiet conversations already circulating in Westminster about potentially revisiting some of the harsher aspects, particularly the ten-year inheritance tax tail, it would seem that policymakers are potentially anticipating some backlash and possible damage control ahead.
Losing Ground to Global Competitors
In today’s increasingly competitive global tax landscape, the UK is beginning to look like an outlier for the wrong reasons. Jurisdictions like Dubai, with its zero income tax and fast-track residency schemes, are positioning themselves as havens for capital. Singapore continues to attract with its transparency, low tax rates and consistent policy environment. Switzerland, although no longer as secretive as in decades past, still offers its forfait regime for wealthy foreigners, a system rooted in predictability.
By comparison, the UK is beginning to look unstable. The erosion of the non-dom regime, combined with the introduction of a ten-year inheritance tax tail and ongoing regulatory shifts, has significantly weakened the country’s standing in the global competition for capital. Wealth planners note that the UK is rapidly losing its appeal as a long-term base for wealth structuring.
Moreover, unpredictability is itself a form of tax. For high-net-worth individuals who prioritise clarity and consistency, the risk of further reactive policy changes creates a disincentive to commit. Once trust in a legal and fiscal framework is lost, the reputational damage can outweigh the technicalities of any single reform.
The Economic Ripple Effect
This isn’t just about the ultra-wealthy swapping Mayfair for Monte Carlo or moving family trusts to Geneva. The impact is rippling through the broader UK economy, from high-end property markets and private schools to luxury retailers, art dealers, venture capital firms and the wider network of legal and financial advisors that supports global wealth.
The reputational risk is mounting. Once a jurisdiction is perceived as hostile to wealth, regaining the confidence of internationally mobile families becomes a long and uncertain process. It's becoming a question of long-term trust in the system.
High-value real estate transactions, often a bellwether of international investor sentiment, are beginning to slow. At the same time, private equity and venture firms, which have traditionally used the UK as a base for operations and capital raising, are reassessing their presence. The danger is not only the departure of individual clients, but a compounding cycle: reduced capital inflows lead to greater fiscal strain, which in turn can trigger further tax reforms, deepening the exodus.
The Shift in Structures
Behind the scenes, a planning boom is underway. Wealth structuring professionals are seeing a sharp rise in demand for family investment companies, trust arrangements, asset segregation and minority interest discounting - strategies designed to preserve capital amid a less hospitable tax environment. Intergenerational gifting, previously treated as a longer-term consideration, is now being accelerated as families seek to get ahead of further reforms.
In private equity and hedge fund circles, the restructuring is more than symbolic. Fund managers are actively redomiciling general partner and carried interest structures to jurisdictions such as Luxembourg and the Channel Islands. For many, personal relocation is also on the table, driven by the need for long-term stability and favorable treatment of investment income.
Entrepreneurs, particularly those nearing a business exit, are also responding decisively. A growing number are willing to become non-UK residents for multiple years to reduce their exposure to capital gains and inheritance tax. The overall tone of planning has shifted from cautious and speculative to urgent and preemptive. What was once a set of isolated responses is now shaping into a broader repositioning of how and where wealth is managed.
‘The UK is Now Complicated’
Among family offices and international investors, the shift in sentiment is now undeniable. What was once considered a cornerstone jurisdiction for wealth management, legal domicile and philanthropic infrastructure is increasingly being viewed through a lens of caution and complexity. The UK is now more often described in advisory circles as complicated and volatile - a marked change from just two years ago.
Contingency planning has moved from the margins to the mainstream. Family offices are actively exploring alternative jurisdictions not only for tax efficiency but also to future-proof their legacy strategies against further policy unpredictability. In many cases, capital is not being withdrawn outright, but it is no longer being reinvested with confidence.
This climate of uncertainty is also reaching areas previously considered immune to fiscal or political turbulence, including philanthropy and ESG initiatives. Some wealth holders are choosing to establish charitable foundations offshore to avoid new compliance burdens, while others are scaling back or redirecting impact investments that were previously anchored in UK-based causes. As regulatory friction increases, long-term commitment begins to erode.
A Glimmer of What Could Be
The question now is not whether the UK can regain confidence, but how quickly it can act to prevent further erosion. Advisors on the frontlines are calling for a pause in the ongoing legislative churn and advocating for a more durable, globally competitive framework to attract and retain international wealth.
Their recommendations are pragmatic. Many support extending the foreign income and gains exemption for new arrivals from four to ten years, potentially introducing a graduated charge after the fourth year to balance flexibility with revenue needs. Others argue for repealing the ten-year inheritance tax tail and reinstating the previous three-year rule, which aligned more closely with international norms. Most critically, there is a broad call for policy stability, a break from short-term tinkering in favor of a predictable environment where long-term planning can once again take root.
Progressive taxation and global competitiveness are not mutually exclusive. But they require a clear, consistent approach is something the UK currently lacks, just when clarity is most needed.
Conclusion
The UK didn’t just scrap a tax regime, it dismantled a tacit contract with the world’s globally mobile elite. That unwritten understanding promised stability, clarity, and respect for long-term planning in exchange for investment and presence. Without a credible path to restoring that trust, Britain risks more than just capital outflows. It stands to lose its status as a premier global wealth hub in an era where mobility is not merely a privilege, but a defining expectation.
About the Author
Anna Warren is a Tax Director at Bentley Reid, where she advises high-net-worth individuals, trustees, and family offices on tax and estate planning. A Chartered Accountant and Chartered Tax Adviser with over 17 years of international experience, Anna integrates technical expertise with a holistic approach to wealth management. Prior to joining Bentley Reid, she worked in KPMG’s private client team in London and later advised a prominent UK family office on multi-generational structuring. She is currently based in Hong Kong.
Introduction
For decades, the UK offered a peculiar kind of promise to the world’s wealthy: come live here, invest in our economy, and as long as you keep your money offshore, we won’t tax it. It was the infamous non-dom regime, a system both admired and maligned, yet effective in attracting capital, talent, and trust.
Now, that promise has been revoked, and the consequences are becoming very real.
A Policy Born of Politics, Not Planning
Behind the abolition of the non-dom regime lies what many experts interpret as a politically motivated manoeuver, rather than a considered economic reform. The government’s desire to project fairness and simplicity in the tax system may resonate with domestic voters, but it sends a very different message to wealthy internationally mobile individuals and institutions.
Evidence of capital flight is already surfacing. Wealth managers report rising inquiries from clients seeking to leave the UK, restructure assets, or establish roots elsewhere. With quiet conversations already circulating in Westminster about potentially revisiting some of the harsher aspects, particularly the ten-year inheritance tax tail, it would seem that policymakers are potentially anticipating some backlash and possible damage control ahead.
Losing Ground to Global Competitors
In today’s increasingly competitive global tax landscape, the UK is beginning to look like an outlier for the wrong reasons. Jurisdictions like Dubai, with its zero income tax and fast-track residency schemes, are positioning themselves as havens for capital. Singapore continues to attract with its transparency, low tax rates and consistent policy environment. Switzerland, although no longer as secretive as in decades past, still offers its forfait regime for wealthy foreigners, a system rooted in predictability.
By comparison, the UK is beginning to look unstable. The erosion of the non-dom regime, combined with the introduction of a ten-year inheritance tax tail and ongoing regulatory shifts, has significantly weakened the country’s standing in the global competition for capital. Wealth planners note that the UK is rapidly losing its appeal as a long-term base for wealth structuring.
Moreover, unpredictability is itself a form of tax. For high-net-worth individuals who prioritise clarity and consistency, the risk of further reactive policy changes creates a disincentive to commit. Once trust in a legal and fiscal framework is lost, the reputational damage can outweigh the technicalities of any single reform.
The Economic Ripple Effect
This isn’t just about the ultra-wealthy swapping Mayfair for Monte Carlo or moving family trusts to Geneva. The impact is rippling through the broader UK economy, from high-end property markets and private schools to luxury retailers, art dealers, venture capital firms and the wider network of legal and financial advisors that supports global wealth.
The reputational risk is mounting. Once a jurisdiction is perceived as hostile to wealth, regaining the confidence of internationally mobile families becomes a long and uncertain process. It's becoming a question of long-term trust in the system.
High-value real estate transactions, often a bellwether of international investor sentiment, are beginning to slow. At the same time, private equity and venture firms, which have traditionally used the UK as a base for operations and capital raising, are reassessing their presence. The danger is not only the departure of individual clients, but a compounding cycle: reduced capital inflows lead to greater fiscal strain, which in turn can trigger further tax reforms, deepening the exodus.
The Shift in Structures
Behind the scenes, a planning boom is underway. Wealth structuring professionals are seeing a sharp rise in demand for family investment companies, trust arrangements, asset segregation and minority interest discounting - strategies designed to preserve capital amid a less hospitable tax environment. Intergenerational gifting, previously treated as a longer-term consideration, is now being accelerated as families seek to get ahead of further reforms.
In private equity and hedge fund circles, the restructuring is more than symbolic. Fund managers are actively redomiciling general partner and carried interest structures to jurisdictions such as Luxembourg and the Channel Islands. For many, personal relocation is also on the table, driven by the need for long-term stability and favorable treatment of investment income.
Entrepreneurs, particularly those nearing a business exit, are also responding decisively. A growing number are willing to become non-UK residents for multiple years to reduce their exposure to capital gains and inheritance tax. The overall tone of planning has shifted from cautious and speculative to urgent and preemptive. What was once a set of isolated responses is now shaping into a broader repositioning of how and where wealth is managed.
‘The UK is Now Complicated’
Among family offices and international investors, the shift in sentiment is now undeniable. What was once considered a cornerstone jurisdiction for wealth management, legal domicile and philanthropic infrastructure is increasingly being viewed through a lens of caution and complexity. The UK is now more often described in advisory circles as complicated and volatile - a marked change from just two years ago.
Contingency planning has moved from the margins to the mainstream. Family offices are actively exploring alternative jurisdictions not only for tax efficiency but also to future-proof their legacy strategies against further policy unpredictability. In many cases, capital is not being withdrawn outright, but it is no longer being reinvested with confidence.
This climate of uncertainty is also reaching areas previously considered immune to fiscal or political turbulence, including philanthropy and ESG initiatives. Some wealth holders are choosing to establish charitable foundations offshore to avoid new compliance burdens, while others are scaling back or redirecting impact investments that were previously anchored in UK-based causes. As regulatory friction increases, long-term commitment begins to erode.
A Glimmer of What Could Be
The question now is not whether the UK can regain confidence, but how quickly it can act to prevent further erosion. Advisors on the frontlines are calling for a pause in the ongoing legislative churn and advocating for a more durable, globally competitive framework to attract and retain international wealth.
Their recommendations are pragmatic. Many support extending the foreign income and gains exemption for new arrivals from four to ten years, potentially introducing a graduated charge after the fourth year to balance flexibility with revenue needs. Others argue for repealing the ten-year inheritance tax tail and reinstating the previous three-year rule, which aligned more closely with international norms. Most critically, there is a broad call for policy stability, a break from short-term tinkering in favor of a predictable environment where long-term planning can once again take root.
Progressive taxation and global competitiveness are not mutually exclusive. But they require a clear, consistent approach is something the UK currently lacks, just when clarity is most needed.
Conclusion
The UK didn’t just scrap a tax regime, it dismantled a tacit contract with the world’s globally mobile elite. That unwritten understanding promised stability, clarity, and respect for long-term planning in exchange for investment and presence. Without a credible path to restoring that trust, Britain risks more than just capital outflows. It stands to lose its status as a premier global wealth hub in an era where mobility is not merely a privilege, but a defining expectation.
About the Author
Anna Warren is a Tax Director at Bentley Reid, where she advises high-net-worth individuals, trustees, and family offices on tax and estate planning. A Chartered Accountant and Chartered Tax Adviser with over 17 years of international experience, Anna integrates technical expertise with a holistic approach to wealth management. Prior to joining Bentley Reid, she worked in KPMG’s private client team in London and later advised a prominent UK family office on multi-generational structuring. She is currently based in Hong Kong.
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