An Exodus of the Wealthy from the UK, and The Lure of the ‘Britannia Card’-Direct from the ‘Party of Workers’

The UK is in the midst of an exodus of the super-wealthy, a phenomenon that has been termed by some as ‘Wexit’, having followed in the aftermath of Brexit. Concerns are that the departure of large numbers of well-heeled individuals will stifle economic growth and further devastate a struggling British economy, mandating urgent corrective action.  

First of all, for the purposes of this discussion, we will have to start by defining the wealthy and identifying their various categories. In terms of dollar wealth, a High Net-Worth Individual (HNWI) is a person lucky enough to have more than $1 million in liquid investable assets, which include cash and other assets that can be readily exchanged for cash (bonds, stocks, marketable securities). By contrast, illiquid assets, such as real estate (residential or commercial property), consumer durables, collectibles (art, jewellery), and exotic investments (antiques, classic cars), may not be readily convertible to cash. Within the UK, the threshold for identifying HNWIs appears to vary between £1 million and £3 million, depending on the source quoted. Very-High Net-Worth Individuals (VHNWIs) own between $5 million and $30 million in liquid assets, while the richest of the lot, or Ultra-High Net-Worth Individuals (UHNWIs), hold more than $30 million. Last year, the US, China, India, Japan, and France had the highest concentration of HNWIs in the world. In recent years, the top 1% have seen their share of the world’s wealth increase disproportionately when compared to the rest of us, especially after the COVID pandemic.

 This year, according to the Henley Private Wealth Migration Report 2025 from Henley & Partners- “the global leader in residence and citizenship by investment”-an estimated 142,000 HNWIs are set to move across national borders, in “the largest voluntary transfer of private capital in modern history.” The UK is predicted to lose 16,500 HNWIs, “collectively holding an estimated £66 billion in liquid investable assets”, over the same period. The previous year, the UK had already lost 10,800 HNWIs. France, Germany, and Spain are also likely to see a reduction in millionaire numbers.

 The reasons for capital flight from Britain’s shores include plans to reform the protected tax status for non-domiciled residents, who may be required to pay capital gains tax and income tax on overseas income if they have resided in the UK for 4 years or more, while their overseas assets will be subject to inheritance tax at 40% after 10 years of residence. To be fair to them, taxes on overseas assets and income may be reasonably considered a form of double taxation.

 The phenomenon of ‘tax exiles’ was a defining feature of 1970s Britain, when many high-profile UK citizens fled a punitive top rate of 83% on ‘earned’ incomes above £24,000, and a top rate of 98% on ‘unearned’ investment incomes. Prominent tax exiles included actors (Michael Caine, Sean Connery, Roger Moore), musicians (Mick Jagger, Rod Stewart), and other celebrity figures, and Monaco, the South of France, and Switzerland were among the preferred destinations. High taxes failed to achieve desired fiscal objectives and were partly reversed after Margaret Thatcher came to power in 1979, although many billionaires have since continued to seek domicile in tax havens. Currently, many HNWIs residing in the UK are foreign citizens, not known widely and with less incentive to remain in the UK when changes to the tax regime no longer favour their own interests. Varying combinations of liberal tax regimes, positive incentive schemes, including golden visas, and light regulations, are making the UAE, US, Italy, Switzerland, and Singapore popular with HNWIs choosing to leave the UK.

 Wealth naturally begets wealth. HNWIs benefit from profits generated by their investments, which are further multiplied by compound interest payments on their returns. They have complex finances, spanning diversified investment portfolios, various taxes, trusts and foundations, all of which requires careful estate planning. Their deep pockets enable philanthropic efforts, and their charitable donations are often commemorated in the names of recipient organisations, schemes, and awards. Most important of all, the top 1% have contributed 28.2 % of all income tax revenue in 2024-25, despite accounting for only 13.3% of total national income in the UK. Their contributions have also steadily risen over time, from changes to the tax regime. Quoting percentages to demonstrate the apparent unfairness of the tax regime for the highest earners is, however, somewhat unhelpful. Given the stratospheric earnings of the financial oligarchy, you have to look at the actual sums involved, account for differential tax bands, consider the relative toleration for taxes at different levels of income and wealth, and also recognise that tax avoidance and tax evasion are by no means unusual at the top. Under certain circumstances, attempts to minimise one’s tax burden can even be likened to a cat-and-mouse game, in which the mouse is both wilier and stronger than the cat.

 The Reform Party seems keen to attract HNWIs, both foreign citizens and returning British expatriates, and has come up with a one-off “landing fee” of £250,000-the ‘Britannia Card’-to be paid to the Treasury by non-domiciled UK residents, not committed to permanent residence, in return for “fair, limited tax treatment on offshore earnings.” The card comes with a ‘Britannia Residence Permit’, a 10-year renewable multi‑entry residence permit. The expected £2.5 billion to be generated by this ‘Robin Hood’ flat tax will be split up into dividends of between £600 and £1,000 and then handed out to the bottom 10% (estimated to be around 2.5 million) of low-income full-time workers, although how they will be identified is unclear. Critics have referred to this redistributive scheme as a ‘Billionaire’s Bonanza’-one which provides lifelong exemption from taxes on overseas income and assets in return for a one-off payment. The scheme could cost as much as £33.9 billion in lost tax revenues over five years, from 2026 to 2030, as per Office for Budget Responsibility projections. There are indeed some unanswered questions regarding the potential benefits of the Britannia Card.  

 HNWIs are financially powerful, and may seek to influence government policy and promote favoured politicians through donations, endorsements, and corporate lobbying. They can be relied upon to contribute positively to the retail, hospitality, and property (especially high-end) sectors, and other domestic businesses, through their lavish spending, and to the wider economy through their higher tax contributions. The growing power and influence of billionaires in the US should, however, come as a warning. Besides, pandering to the particular demands of HNWIs in matters of tax does not necessarily guarantee increased investment of their capital where most needed, a surge in innovative entrepreneurial activity, or the creation of new value-added jobs in the host economy, as they are, after all, free agents and can choose how best to delve into, and then spend, their vast pots of money. Under the circumstances, the Britannia Card may not prove to be sufficient to attract HNWIs to our shores, whatever the benefits they may bring to the UK economy.

Ashis Banerjee