Between a series of tax hikes and political instability, the UK has experienced a record exodus of millionaires in 2024 – with some sources reporting as many as 11,300 millionaires leaving London over just 12 months.
Failure to make the UK a more appealing destination for wealthy investors in 2025 could have far-reaching implications on the UK’s already volatile markets and turbulent economy, as well as its global reputation and position.
Why are investors leaving the UK?
While there are multiple, complex reasons driving the mass exodus of wealthy investors from the UK, there are some factors that are undoubtedly propelling this substantial shift, including:
Tax rises and reforms
Rachel Reeves, the Chancellor of the Exchequer, revealed in the Autumn Budget that tax exemptions for non-domiciled individuals, also referred to as ‘non doms’ (people who live in the UK but have a permanent tax address abroad), would be removed.
Previously, this tax exemption would allow foreign nationals with a high-net-worth living in the UK to protect their overseas income from being taxed.
This tax reform came into effect from 6 April 2025 but instead of yielding extra tax receipts of £10.3bn as estimated by the Office for Budget Responsibility (OBR), it’s been suggested that heavy losses could be in store instead as impacted individuals reconsider their UK residency.
According to the Centre for Economics and Business Research (Cebr), over £12bn in tax revenue losses could be heading towards the Treasury in the event that 50% of non-doms leave by 2030. They added that even if not a single non-dom individual left the UK, the Treasury would still only see gains of £2.5bn in the first year.
A rise in the higher rate Capital Gains Tax (CGT) to 24% has also contributed to the exacerbation of the UK tax burden as more wealthy individuals decide to say farewell to the UK.
In the search for less hostile environments, some financial advisory organisations are reporting an increase in investors looking to preserve their wealth in other countries including tax-friendly locations like Italy, Switzerland, Dubai, Portugal, and Malaysia.
Global decline of the London Stock Exchange
Over recent years, the London Stock Exchange (LSE) has faced serious concerns regarding its declining position in global rankings. Following a “net decline in investment in UK funds for the past nine consecutive years” and an increasing preference for US markets, the LSE is quickly losing its status as a global investment platform.
This lack of confidence in the LSE further pushes wealthy investors away from the UK and towards more dynamic and competitive markets, such as Euronext and Eurex.
Economic uncertainty and political instability
Unlike more recent tax reforms that have shaken wealthy investors, some factors that have contributed to this decline have been building up for nearly a decade. This includes the UK’s only partial recovery from the 2008 recession, uncertainty surrounding Brexit, and the falling value of the pound.
With any political or economic turbulence, there’s risk – something that successful investors like to be able to predict with some degree of accuracy. The volatile UK environment and depreciating pound is actively discouraging foreign investors from keeping their capital in the UK.
Moving forward
From an increasing tax burden to the lack of foreign investment, the sustained departure of high-net-worth individuals from the UK is likely to have a devastating impact on the nation’s economy, public services, and global reputation as a highly attractive country for investment.
To prevent the further exodus of millionaires from the UK in 2025, it’s crucial that the UK turns its focus to reconsidering the relevant tax policies, strengthening the LSE by making it more attractive to companies, and establishing an environment of political and economic certainty.