According to the latest statistics, it is expected that by the end of this year, as many as 16,500 millionaires will net outflow of the UK, setting a record high.
They took away not only wealth, but huge assets of as much as $78.6 billion, which is almost a quarter of the total amount of British annual taxes.
All this led to a decree issued by the British Labour Government: From April 6, 2025, the tax privileges for non-Britain citizenship, which have been in place for more than 200 years, will be officially abolished.
This ancient system, born during the Napoleonic Wars in 1799, was once the "golden sign" of Britain attracting global capital.
It allowed foreign settlers not to pay taxes on this part of their wealth as long as they did not transfer their overseas income to the UK.
From the nobility of the colonial era to the Russian oligarchs of the globalized era, the Middle Eastern oil king, and the wealthy merchants of Asia, more than 70,000 rich people have benefited from this privilege.
They enjoy the best of London’s educational, financial and cultural resources without the same tax liability as the native.
Now, this "party" that lasted for more than two centuries has been forcibly terminated.
The new policy, led by Finance Minister Reeves, was replaced by a “residential-oriented” tax system.
New immigrants still have a buffer for the first four years, and they can be exempted from overseas income tax.
But after the four-year period, no matter where your money is in the world, whether or not it is remitted back to the UK, you must pay taxes to the UK Revenue and Customs in accordance with the law, just like the Queen's postman.
Even more frightening for the wealthy is the fact that their global assets could face up to 40% inheritance taxes in the future, even if the assets are hidden in family trusts.
Why did the British government risk "killing the goose that lays the golden eggs" and smash this gold-sucking signboard with its own hands? The answer is written in the national ledger: Britain is really running out of money.
The tax knife.
In recent years, Britain's public debt has soared to more than 100% of GDP, and its fiscal deficit has snowballed.
In fiscal years 2024 to 2025 alone, the budget deficit is 15 billion pounds higher than expected.
Birmingham, Nottingham and other big cities have successively declared de facto bankruptcy, and public services have shrunk significantly.
The Labour government faces a tax gap of up to £ 40 billion.
Reeves bluntly pointed out that the richest 1% in the country hold nearly half of the wealth and pay less than a third of taxes.
Against this background, Opening a knife to the wealthiest “outsiders” was both a financially helpless move and a response to more than 60% of the British people’s calls for social fairness.
However, this "tax sickle" swung at the rich is triggering a game that may cost both sides a painful price.
The rich responded directly and quickly-fleeing.
By 2024, the number of net losses of British millionaires has risen by 157 percent to 1,08 million.
By 2025, this number is expected to climb to 16,500.
This is not just a number, but a real-life case behind it.
Hong Kong tycoon Li Ka-shing's family has been intensively selling Britain's port, electricity and other infrastructure assets since 2024; another Hong Kong tycoon Liu Luoxiong will put up his London mansion for the third time in 2025, with an asking price of up to 900 million Hong Kong dollars.
The financial world was also shaken, with a group of top bankers, including the former vice chairman of Goldman Sachs, packing their bags and preparing to move their offices to Milan, Italy.
Bloomberg predicts that 450 billion pounds will flow out of the UK between 2025 and 2030.
Just nine months before 2024, $32 billion would flow from Britain to the UAE.
The double loss of capital and talent has caused an immediate impact on the British economy.
As a result, London fell out of the top five wealthiest cities in the world, the high-end service industry is expected to lose 12,000 jobs, government bond yields soared, and the pound continues to depreciate.
The Oxford School of Economics model even issued a “death spiral” alert: Capital outflows have caused the tax base to shrink, and governments may be forced to further raise taxes to fill the gap, triggering worse human and capital outflows.
But from the British government’s point of view, it’s not unprofitable in the short term either.
It is predicted that, In fiscal year 2025, the UK's fiscal deficit is expected to be depressed to 3.1% of GDP.This will be the most significant fiscal “slowdown” since the 2008 financial crisis.
The Labour government took an economic stake in exchange for financial breathlessness and temporary satisfaction of the public opinion.
Whether this is the long-term plan for scratching the bone, or the short-sighted act of drinking and stopping thirst, the trial of history may take years.
If you think it’s just the “homework” of a British family, it’s a big mistake.
The reason Britain dared to take this astonishing step was precisely because a global “tax sky network” has been quietly tightened.
Rich people can run, but there are fewer and fewer places to hide.
The technological revolution in wealth management
“Global tax havens are dead” – this argument has become a consensus in the global wealth circle today in 2025.
But what "died" was not the low-tax zone itself, but the "barbaric era" where wealth could be easily hidden by relying on bank secrecy and opaque information.
A huge net woven by CRS (Common Reporting Standards) and FATCA (Fat Coffee Clause) of the United States has enveloped the world.
CRS covers more than 126 countries and territories, exchanging hundreds of millions of financial account information each year, involving assets of up to €13 trillion.
China has also activated information exchange relationships with 116 countries and regions.
This means that information about a Chinese tax resident’s deposits in Australia will be packaged by the Australian Tax Service and automatically sent to the Chinese tax department.
Under this skynet, former "tax havens" have "surrendered".
The Swiss bank, known for its confidentiality, has now transferred data of tens of thousands of customers to countries.
Singapore, once a haven for Asian wealth, has now soared from S$10 million to S$50 million, and requires strict funding traceability for 40% of high-risk customers.
Even in Dubai, housing purchases now have to provide proof of asset source for a decade.
These offshore islands, Cayman and BVI, have also begun to require layers to penetrate and register the final actual beneficiaries.
The decline of the old paradise gave birth to the rise of the new paradise.
Dubai in the United Arab Emirates has become the biggest winner, expected to attract nearly 10,000 millionaires in 2025.
It halved the threshold of "golden permanent residence" to about $200,000, and it only takes 72 hours to register a family office at the fastest.
Italy has introduced an attractive "alternative tax" scheme, which can solve the global tax problems of the whole family by paying a fixed amount of tax (such as 200,000 euros) every year.
What these new "paradise" have in common are: They are no longer attracting customers by “information black holes,” but they are competing with more favorable, clearer, and more compliant “regles.”
In the face of global tax encirclement and suppression, the coping strategies of the rich have also experienced a profound "technological revolution".
Simple offshore companies and offshore accounts have become obsolete, replaced by a sophisticated model known as "distributed wealth architecture".
Its core idea is to deliberately separate and globalize nationality, tax resident status, asset location, and company registration.
A wealthy man may hold a country A passport, reside in country B to obtain tax resident status, his core assets are placed in country C through a trust, while companies that operate on a daily basis are registered in country D.
The forms of wealth are also increasingly diversified, and in addition to traditional financial assets, cryptocurrencies such as Bitcoin, Ethereum, and digital artworks, high-end collections, more difficult to track and evaluate assets are becoming new carriers of wealth inheritance and transfer.
The core competencies in wealth management are expanding from traditional legal and tax knowledge to algorithmic and technical competencies.
It is said, Some top family offices have even started hiring algorithmic engineers to specialize in loopholes in digital tax systems in various countries and the arbitrage space of rules between different jurisdictions.
Their goal is no longer to “hide” wealth, but to conduct legitimate tax “planning” and optimization under the rules of global transparency, through complex legal and technical means.
This tax reform in the UK is not so much a country's fiscal self-rescue, but rather a microcosm of the ebbing of the dividends of globalization and the entry into a new stage of the game between national sovereignty and working capital.
Over the past few decades, capital has easily crossed national borders, enjoying the lowest tax burdens and the most relaxed regulations.
and today, Faced with high corporate debt and fair internal demands, governments are uncompromisingly tightening up and trying to take back tax control into their own hands.
References:
The world's richest people are fleeing Britain
2024-09-26 17:36 · Times Weekly