More than six in ten millionaire investors have considered leaving the UK because of concerns over taxation, new research from Wealth Club, the UK’s leading non-advised investment service for high-net-worth individuals, shows.
The study of 341 Wealth Club clients, all with overall wealth of £1 million or more, found that 61% have at least considered becoming non-UK tax resident because of UK taxes.
This includes 16% who are actively considering leaving and 45% who have considered it but are unlikely to move. Just 36% said they have never considered leaving the UK because of tax.
The estimated average wealth of those surveyed was around £4.5 million.
The research found respondents had overwhelmingly built their own wealth. Just 2% said inheritance or family wealth was the main source of their wealth. Around 12% accumulated most of their wealth by starting a business, 11% through self-employment, 40% through employment earnings and a further 33% through successful investing.
The Wealth Club research is supported by recent analysis of official data showing the number of UK millionaires has fallen to 442,000 – the lowest level since 2007 and around 7% lower than a year earlier. While some of the decline reflects weaker asset prices, many commentators believe an increasing number of wealthy people are choosing to leave the UK.
The survey highlights why so many wealthy investors are uneasy. Almost all (97%) believe taxes will definitely or probably increase over the next 12 months, with more than half (53%) convinced tax rises are inevitable.
Inheritance tax is the tax rise that concerns respondents most (22%), followed by wealth taxes (21%) and capital gains tax (18%).
Almost half (47%) identified higher taxes as the single biggest threat to their wealth, while a further 26% cited government policy. Together, these ranked well ahead of inflation, market volatility and geopolitical events.
Alex Davies, Founder and CEO of Wealth Club, said: “Six in ten millionaire investors have at least considered leaving the UK because of taxation. Of course, there is a world of difference between thinking about leaving and actually doing it, and most people who consider it ultimately decide to stay.
What is often overlooked is where this wealth came from. Almost all the investors we surveyed built it themselves through work, starting businesses or investing over many years. The overwhelming majority earned it.
“This matters. These are the people who work hard, create businesses and jobs, invest in growing companies and generate significant tax revenues. Governments inevitably face difficult choices and must balance the public finances. However, every tax rise and every policy change that makes Britain a less attractive place to save, invest and build businesses risks encouraging more wealth creators to look elsewhere. That would ultimately leave the UK poorer, not richer.”
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