UK news: Brexit a bad bet for Britain

The UK’s peak net outflow year was 2017, following the Brexit referendum in 2016. Prior to this, the country enjoyed net positive inflows of HNWIs. While net losses dropped slightly between 2017 and 2019, the 2023 forecast indicates a far more significant millionaire exit is currently underway.

Prof. Trevor Williams, former Chief Economist at Lloyds Bank Commercial, says the data offers independent corroboration of the trend of HNWIs leaving the UK. “Whatever one may think about the merits of Brexit, this cohort is voting with its feet. Coupled with the policy change to remove permanent non-domiciled taxpayer status, Brexit has made the UK less hospitable and welcoming to HNWIs. It’s now harder for them to move bestween the UK and EU countries. And evidence shows that the UK’s share of inward investment into Europe has declined since it left the EU, with Germany and France benefiting.”

Commenting in the Henley Private Wealth Migration Report 2023, Sunita Singh-Dalal, Partner, Private Wealth & Family Offices at Hourani, agrees that “the recent unsettling British ‘Non-Dom debate’ triggered by unprecedented political volatility, coupled with rising debt, a dysfunctional healthcare system, high crime rates, and a general sense of lingering malaise, has clearly tarnished the lustre of London.”

The appeal of another financial giant, the US, is also dwindling fast. America is notably less popular among migrating millionaires today than pre-Covid, perhaps owing in part to the threat of higher taxes. The country still attracts more HNWIs than it loses to emigration, with a net inflow of 2,100 projected for 2023, although this is a staggering drop from 2019 levels, which saw a net inflow of 10,800 millionaires.

As leading personal finance columnist, author, and investment expert, Jeff D. Opdyke, points out in the report, “in the past, America was the obvious destination for wealth migrations because of its technology, leadership, and much vaunted freedoms. Soon, however, the US could begin to resemble the UK, traditionally one of the top destinations for migrating wealth, but which is now experiencing a net exodus of HNWI migrants because of the economic impacts wrought by the own goal known as Brexit.”

Fonte Henley & Partners