Billionaires and millionaires are seemingly emigrating in their droves to avoid Britain's fiscal policies – such as ending of the UK's non-dom regime and an increase in capital gains tax
Billionaires and millionaires are seemingly emigrating in their droves to avoid Britain's fiscal policies – such as ending of the UK's non-dom regime and an increase in capital gains tax – which they believe are "crippling" the country's growth.
The latest proposals, which suggest Ms Reeves will impose an exit tax on emigrants looking to sell their British assets after leaving, have led Herman Narula, the boss of £2.5bn tech firm Improbable, to announce plans to move to Dubai.
He is one of several eyeing a move to the UAE tax haven, where businesses pay no tax on profits up to AED $102,000 (£77,700) and just nine per cent above that threshold – a stark contrast to the UK's 25 per cent levy.
They may look to do so before Ms Reeves announces her Autumn Budget on November 26, where she is expected to squeeze more from the better-off with measures such as higher taxes on expensive properties and an "exit tax" to penalise people moving their wealth out of the country.
Peter Ferrigno, group tax director at global residence and citizenship advisory firm Henley & Partners, told LBC: "The UAE has an environment that actively encourages investment, and makes it as easy as possible to conduct business internationally.
"Many former non-doms that have business or family links in Asia or the Middle East also find it a logical place to base themselves as the travel time is less.
"The ready availability of lifestyle factors such as housing and healthcare also play a part, especially as most facilities are new and modern.
"And the application process is slick and efficient – it takes a matter of weeks."
These regulations attracted Nikolay Storonsky, the multibillionaire founder of Revolut, to shift his main residence to the Middle East from these shores last month.
He made the announcement shortly after his banking app firm relocated to new global headquarters in Canary Wharf, London.
The UK's non-dom regime had meant wealthy individuals could avoid paying UK tax on foreign income and capital gains.
Its scrapping was initially proposed by the Conservative government and was eventually finalised under Sir Keir Starmer's premiership.
The non-dom removal, alongside a 40 per cent rate of inheritance tax and a capital gains tax raise in autumn 2024 from 20 per cent to 24 per cent, has meant wealthy families "feel they have almost no choice but to leave", Mr Ferringo said.
"For billionaires specifically, the non-dom tax changes and the inheritance tax rate have made the UK an uncompetitive place to live," he added.
"Otherwise if they died unexpectedly their families would lose 40 per cent of everything.
"This used to be potentially manageable through holding the assets through a family trust structure, but those options have also been limited."
In June, Henley & Partners forecast that the UK will lose 16,500 high-net-worth individuals this year, more than any other country.
One of those high-profile departures was Norwegian-born shipping tycoon John Fredriksen, the UK's ninth richest billionaire, who claimed "Britain had gone to hell".
Alongside moving his business to the UAE, he placed his prestigious private homes, The Old Rectory in Chelsea up for sale.
Former Manchester United defender Rio Ferdinand, who has an estimated net worth of £57m, also admitted to LBC he relocated to Dubai this summer because of Britain's high tax rate.
He questioned where British taxpayers' money is being spent as public services appear to be "falling apart".
Speaking to LBC's Tom Swarbrick, the ex-England player said if services such as the NHS were "working perfectly well", then people "don't mind" paying tax.
"But when there's things that are falling apart and going wrong in the country, then I sit there and go, we pay towards tax and is it really going towards the things that are actually benefiting the people that live here?" he added.
Critics place much of the blame for the mass exodus on Rachel Reeves' fiscal policies, but Mr Ferringo attributes the negative sentiment felt by entrepreneurs back to the Brexit.
"There's also a general feeling that the UK has lost its way over the last decade since Brexit, and has turned inward looking and focusing only on its own problems," he said.
"Whilst narratives about the UK being 'broken' are massively overstated, there is a general malaise that means people who have the option of leaving are considering it more than they would have done in the past."
But business leaders have warned the dispersal of entrepreneurs would continue if Reeves went ahead with plans for an exit tax on wealthy emigrants.
Harry Stebbings, who runs one of Europe’s largest venture capital funds, told the Times that the move would be "the final nail in the coffin" for entrepreneurs.
He said 15 founders of British companies worth more than £500 million had contacted him this month with plans to leave the country.
In response, the Startup Coalition lobby group penned a letter to the Chancellor urging her to to rethink the tax plans.
Asked how the rich could be attracted back to the UK, Mr Ferrigno simply said: "Make it easy for them to come."
He added: "Investor visas are an accepted thing in many countries, and the UK's previous scheme was very successful in raising foreign investment.
The UK's ambivalence to migration is very strange. We refer to it as the 'small jets problem'. There should be plenty of rich people wanting to come to the UK as a relative safe haven but there is no simple route for them to do so.
"Around 2-3,000 foreign nationals bringing £2-3m each plus an annual tax charge of £250-300,000 if similar to Italy's virtually fills the famous Black Hole that the Chancellor is looking to fill.
"It's like cash lying on the pavement that has not been picked up."
