Britain's wealthy flee to Italy and Greece ahead of April tax raid
Are you moving to another country to protect your finances ahead of the end of the tax year? Email us at money@telegraph.co.uk
Wealthy families desperate to avoid high taxes are rushing to move to Italy and Greece before the end of the financial year, according to experts.
British taxpayers are fleeing to low-tax regimes abroad before April 5, to make it easier to ditch UK residency in the coming tax year.
Wealth managers cited Labour's inheritance tax raid, increases to capital gains tax, and the ending of the non-dom regime as the main drivers of the exodus.
Under reforms from April, all UK resident individuals will pay tax on their worldwide income and gains, and the remittance basis, where residents only pay tax on the amount of income or gains they bring into the UK, will come to an end. Frozen income tax thresholds, which drag more people into paying higher rates, will remain frozen until 2028-29.
Chris Etherington, of accountancy firm RSM, said Mediterranean countries like Italy and Greece were proving attractive destinations as they offer preferential tax regimes, similar to the non-dom rules that are set to be abolished in Britain in April.
Non-dom status allows foreigners to live in Britain but avoid paying UK tax on money they make overseas.
The rush to quit Britain before the new tax year means some people are leaving the country 'without a fully-formed plan', according to Mr Etherington.
He added: 'There may be a bit of a Thelma and Louise philosophy: 'What if we just kept driving?' The key will be ensuring they do not drive off a cliff and land themselves in hot water with HMRC in due course.'
Christopher Groves, a partner at high-end international law firm Withers, said he was seeing a 'huge spike' in clients moving to Italy, and a rush to make the move before the end of the tax year.
He added: 'It's important to make sure you're gone by 6 April if you're going to leave next year. You need to have found your villa in Marbella or apartment in Monaco.
'The changes to non-dom and inheritance tax rules have pushed lots of people who didn't have a real plan to leave the UK to bring that forward, which means they're doing things in a less well thought through way.
'The world is so small these days, so it feels like a relatively easy step to take, but there can be practical difficulties.'
You are automatically considered a UK resident if you spend 183 days or more in the UK during a tax year. However, moving abroad does not automatically cancel your UK tax liabilities.
You may be considered a non-resident if you meet automatic overseas tests. These include spending fewer than 16 days in the UK in the tax year if you were not a UK resident in all of the previous three tax years, or spending fewer than 46 days in the UK if you were not a UK resident in any of the previous three tax years.
If you do not meet any of these tests, your residency status may depend on the number of ties you have to the UK, such as family, accommodation, or work.
Britain's tax burden is at its highest level in 70 years and is projected to reach near-record levels by the end of the decade.
The 40pc rate of inheritance tax, in particular, is a 'really big motivation' for wealthy individuals deciding to move abroad, according to Mr Groves.
He added: 'We're so out of step [with other countries]. You can go to Italy and [inheritance tax] is single digits if anything, in Switzerland it's nothing. Here, 40pc above £325,000 is confiscatory by comparison.'
The Office for Budget Responsibility, the official forecaster, expects up to 20pc of non-doms to leave the UK because of the tax raid.
However, wealthy Britons who are not non-doms are also moving to friendlier tax regimes abroad. Britain lost 10,800 millionaires to overseas countries in 2024, more than double the number who left in 2023.
According to research by the Adam Smith Institute (ASI) think tank, each of the millionaires that left Britain last year would have paid at least £393,957 in income tax per year, equal to the income tax take of 49 average taxpayers.
More than a quarter (28pc) of people with investable assets of more than £250,000 questioned by the bi-annual Saltus Wealth Index last month said they were considering leaving Britain within the next 12 months.
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