Tax instability drives ultra-wealthy to pack their bags
Tax instability has driven huge swathes of the UK’s ultra-wealthy to consider leaving the country over the past twelve months.
Two-thirds of the UK’s wealthiest have mulled fleeing the country for tax reasons, according to the latest research from accountancy firm BDO.
But while conversations surrounding tax have focused on the rate Britain’s wealthiest pay, the main factor in considering relocating is the “relentless cycle of policy change” and the uncertainty it creates.
Nearly 50 per cent of Brits cited having certainty and consistency in taxes coupled with a stable government as their reason for leaving, nearly double those who said they were looking abroad for minimal taxation.
In particular, a number described paying tax as a “social responsibility”, citing the difficulty of planning in the current system as more of a burden than actually paying the tax itself.
Elsa Littlewood, Tax Partner at BDO, said: “In recent years, the wealthy have had to face constant changes to tax rules and our research identifies this instability is wearing people down.
“For many, the final straw came when the government started making big changes to inheritance tax and hinting at further changes to Capital Gains Tax.”
“They lack trust in how UK tax will apply over the long timescales needed to manage intergenerational wealth and feel they’re under constant pressure to pre-empt new demands.”
Wealth exodus
The findings come after a wave of high-growth business owners admitted to leaving the UK over the past two years, following changes to the tax regime and growing concerns over the UK’s economic competitiveness.
According to wealth manager Rathbones, nearly 6,000 owners moved abroad, with the UAE found to be the most attractive destination followed by Spain and the US.
The UK also saw a net outflow of 16,500 millionaires last year, equating to $91.8bn (£68.1bn) in investable wealth.
In contrast, jurisdictions such as the US and UAE experienced corresponding inflows.
The government has made sweeping changes to the tax system in recent years, This includes a new inheritance tax regime for business owners, higher rates of capital gains tax and the abolition of non-dom status.
As of April 2025, the abolition replaced the previous system with a residence-based regime, making long term UK residents liable for taxes on worldwide income and gains.
Consideration stage
Despite the recent flood of people leaving, many are still reluctant to take the final step and relocate, with 25 per cent only “briefly” considering so.
Meanwhile, 48 per cent confirmed they are researching options, but have no concrete plans as of yet.
Littlewood argued that if the UK confirmed long-term tax policies that ended the speculation cycle, it would have a greater opportunity to both retain existing wealth and attract fresh capital.
Littlewood said: “If the government provides clearer long-term tax roadmaps and reduces the political theatre around fiscal policy, most would choose to stay. That stability could also draw more international wealth to the UK.
“The benefits are tangible: maximising high-net-worth contributors strengthens the tax base, funds public services, and drives economic growth, outcomes that serve everyone.”