By Fiona Moore, for ExpatBriefing.com 28 February, 2018
High-net-worth individuals (HNWIs) are leaving the UK in search of a more accommodating tax system, political stability, and a higher quality of life, according to leading private wealth advisors.
At a recent panel event sponsored by Locate Guernsey, a government agency which encourages businesses and HNWIs to relocate to the island, 130 private wealth professionals heard relocation experts provide their insights into what is behind the UK’s outflow of HNWIs. The event follows research by New World Wealth published in January, which found that 2017 saw a net outflow of 4,000 HNWIs from the UK.
Reforms to UK law regarding the status of non-domiciles and continued uncertainty over their residency status, as well as high property taxes such as Stamp Duty Land Tax, were cited as reasons for departures as HNWIs look for more tax-friendly locations.
The panel speakers also highlighted political stability and institutional security as priorities for HNWIs, leaving some traditional relocation destinations such as Barbados facing issues due to new international standards and tax cooperation, they said. This has reinforced the attractiveness of low-tax jurisdictions well-embedded within the international system, it was added.
Quality of life factors including education, healthcare, and safety were also emphasized as vital considerations in choosing the right jurisdiction.
Experts agreed that relocation was usually spearheaded by HNWIs and entrepreneurs but that family concerns were often decisive in determining the location of the move – making considerations relating to living standards central to the decision.
Mark Davies, Managing Director at tax advisors Mark Davies and Associates, said: “The perception that the UK is not so welcoming to non-doms will mean that many are looking to leave. It’s worth bearing in mind that if one of these people leaves, that’s the equivalent of 25 average taxpayers and an increasing number are indeed choosing to relocate to jurisdictions, which offer simpler tax regimes and more stability.”
James Quarmby, Partner at law firm Stephenson Harwood, echoed this sentiment, adding: “There’s a risk that HNWIs in the UK will experience compliance fatigue as the tax and regulatory burden continues to increase. If this is the case, the UK could be seen as a hostile place to do business, which could result in HNWIs seeking alternatives.”
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