Ultra-rich 'driven out' of UK by tax changes as non-doms look abroad

A report from estate agency Knight Frank found that the global population of people with assets of $30 million or more had surged from 551,435 to a record 713,626 in five years.

The rise, which equates to 89 multi-millionaires being created every day, has been generated in no small part by the AI tech boom.

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“We are witnessing one of the most significant shifts in global wealth distribution in modern history,” Liam Bailey, the global head of research at Knight Frank, said.

In that time, the US has seen its ultra-wealthy population soar, with 41 per cent of the world’s super-rich residents generated there, lifting its overall overall global share from 33 to 35%.

But in the UK, the growth of the ultra-high-net-worth population has remained sluggish, at 27,876 compared with 24,871 in 2021 (a 12.1 per cent rise).

This outlook is not set to improve, with a hike of only 11% in the next five years to 30,942.

Britain’s performance is well below its European neighbours. France has experienced a 21.3 per cent rise in the richest people from 2021 to 26, along with Germany (32 per cent), Italy (23 per cent) and Spain (41.8 per cent).

Ms Reeves' decision to abolish non-dom tax status, which came into force last April, has been blamed for this slow growth in the report.

The abolition, plus other tax rises brought in by the Chancellor, has encouraged rich people to flee London's expensive property market and look elsewhere.

The findings echo a report from the Centre for Economics and Business Research which suggested a quarter of non-doms could leave as a result.

Quoting the report, Knight Frank said: “Tinkering with wealth and property taxes has continued alongside the rise of low-tax competitors like Dubai.

"October 2024 [when non-dom abolishment was announced] prompted a flurry of high-profile wealthy individuals to announce they were relocating.

"Office for Budget Responsibility projections suggest that as many as 20 per cent of affected non-doms might leave, roughly 1,200 people. The Centre for Economics and Business Research suggests the figure could be closer to a quarter."

Mr Bailey said the UK's tax rules had meant multi-millionaires were now taking extremely expensive short-term rentals for brief visits rather than staying permanently.

The property expert believes governments must try to “trap” wealth by using a combination of taxes and incentives.

“The US economy has been and continues to be a machine for generating wealth,” he told the Times.

"Other countries are growing rapidly, but obviously from a lower base. But the US, as a mature economy, has this unique ability to kind of generate the conditions for very significant wealth creation.”

Elsewhere, there have been significant increases in the richest people around southeast Asia and the Middle East, but the numbers are far lower than the US.

There was a 36.6 per cent rise in Indonesia, and a further 81.7 per cent forecast for 2026-31, while Saudi Arabia (69.2 per cent up in five years and a projected 63.2 per cent for the next five) and Australia (32.5 per cent from 2021-26 and then 58.5 per cent until 2031) are among other leading wealth creation zones.