Charles McDowell, London’s leading property agent for one-percenters, walked into his local café in Chelsea, west London, yesterday morning and ordered a cappuccino and two pains au chocolat.
Not even all that sugar could lighten his mood. “It’s awful. They’re leaving,” he complained. He’s talking about the wealthy families he has helped to make London their home over the past two decades. “I’ve had a Norwegian family on the phone. They’re off to Zurich. A Uruguayan billionaire is going to Madrid. They don’t want to leave but the tax changes leave them no option.”
The government’s decision to scrap the 225-year-old “non-dom” tax system, which enabled some wealthy people living in Britain not to pay UK tax on their overseas earnings in return for an annual fee, has prompted a rush to the departure lounge at Farnborough private airport.
Many wealthy foreigners reluctantly accepted that after four years here they will now have to pay UK tax on their global earnings, but Labour’s decision to bring their worldwide assets into the scope of inheritance tax after ten years is a step too far for most. As one non-dom puts it: “I pay UK tax on earnings but I want to leave my overseas assets to my family.”
That’s the main reason London has lost 11,300 dollar millionaires over the past year, a higher proportion than anywhere other than Moscow, according to the latest study by New World Wealth, a consultancy that tracks moneyed migrants.
Among them may be the steel tycoon, Lakshmi Mittal, whose family is worth an estimated £15 billion and who is considering leaving, and Egypt’s richest person, Nassef Sawiris, owner of Aston Villa football club.
The ebb and flow of millionaires and billionaires may seem irrelevant, even borderline offensive, at a time when prices are rising and stock markets are plunging. Certainly, no violins will play for people who swap Mayfair for Monaco. But Andrew Amoils, head of research at New World Wealth, points out that the rich pay a lot of tax — even under the old non-dom regime. Some 74,000 non-doms paid the UK government £8.9 billion in taxes in 2022-23.
• Read the Sunday Times Rich List
They also spend a lot of money, as McDowell can attest. “Their biggest purchase is a house or usually houses with all the fees that accrue,” he says. The proportion of foreigners who registered to buy a home in the UK fell to just 1 per cent in the first quarter of 2025, figures from the estate agency Hamptons International show. That’s the lowest number since Hamptons began recording the data in 2008.
McDowell points out that, beyond just buying homes, the super-rich “fix them up, which generates plenty of employment and VAT, and then hire people to look after them. They buy cars and hire drivers. They create a family office to manage their wealth and usually set up a business or invest in businesses here. They pay for schools — now plus VAT — and healthcare and go out a lot. They also make donations to museums and galleries. The ripple effect is real.”
One reason London is home to some of the best restaurants, bars and private clubs in the world is that the world’s wealthiest and most discerning people have moved to the capital. The same goes for football clubs, department stores and fashion boutiques. These are now under threat.
The exodus of the wealthy, combined with the government’s decision to scrap duty-free shopping for tourists, cost West End retailers about £640 million last year, up from £400 million in 2023, figures from the New West End Corporation show. Burberry could do with some of that cash.
It’s not only razzle-dazzle assets that are in jeopardy. Sitting in his office in the V&A in South Kensington, Tristram Hunt, the museum’s director, tells me: “The philanthropy and fundraising ecosystem that has developed in London over decades has produced some of the most vibrant, most successful free-to-visit museums in the world. I talk to fellow directors all the time and there is no doubt that prospects for funding and support, especially acquisitions of important works, are being constrained.”
Frédéric de Mévius of the brewing giant AB InBev’s founding family set up an advisory body to support some of Britain’s cultural institutions, including the Science Museum, while he lived here but he recently switched his residency to his native Belgium. Private donations to museums and galleries are more important than ever after some large companies have reduced arts funding following protests from environmental campaigners.
Where there are losers, there are also winners. Companies that help the wealthy to relocate have never been busier. Juerg Steffen, CEO of Henley & Partners, the London-based firm that helps the rich choose the right country or city-state for them and obtain a passport in return for investment, says: “It’s gone crazy. The number of applications set an all-time record in the first quarter of this year — up almost 200 per cent on last year. We’re hiring.”
Steffen is so busy because the rich have never before had so many options to create new gilded homes from homes. Italy, Greece and Portugal all offer residency in return for an annual payment to the treasury — €200,000 in Italy and €100,000 in Greece — or local investments, after which new arrivals pay no tax.
Switzerland also has a “lump sum” scheme, which varies from canton to canton. Italy, Greece, Portugal and Switzerland have double taxation treaties with the UK, which can make it possible to work in Britain for several months a year without becoming liable for UK tax.
But it is glitzy Dubai that is proving the most popular new haven with Brits and other nationalities. The United Arab Emirates has enjoyed a staggering net inflow of more than 7,000 millionaires and billionaires in the past 12 months, more than any country, globally, according to New World Wealth.
You might think that a reduction in the number of wealthy people in London would harm the private jet industry, but since many who have relocated need to come back from time to time for business or family reasons — many have children in boarding school — the number of flights from new destinations is growing fast. Traffic between Dubai and Abu Dhabi and London at £75,000 one way has doubled in the past 12 months, says Toby Edwards, the co-chief executive of Victor, a private jet charter company.
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Despite the gloom in some of London’s pukka neighbourhoods, McDowell spots a glimmer of hope. He points out that while his clients are leaving London, they are not selling up here. They are renting abroad. “They still love all the things that make London the world’s best city — culture, restaurants, social life, schools, language, rule of law, time zone, connectivity — so they’re watching and waiting to see if things improve. It’s a trial separation, not a divorce,” he says.
David Lesperance, a tax adviser who “helps golden geese to fly to pastures new”, as he puts it, says that if Labour were to reverse the inheritance tax measure, “Britain would get back towards the top of the table of the most attractive cities for high-net-worth individuals”.
Foreign Investors for Britain, which represents non-doms, is calling on Keir Starmer to follow President Trump and offer a “golden visa” for foreign investors, with the cost of entry and the right to remain in the UK determined on a sliding scale based on the amount invested.
Copying the Donald would grate but it might help Britain to keep a few more much-needed golden eggs.
