Controversy rumbles on about the effect of replacing the UK resident non-domicile system with a new system and whether it will reduce, rather than increase, revenue.

A net total – taking account of inflows and outflows – of 10,800 millionaires left the UK in 2024, a higher number of such persons making an exodus in any nation apart from China, media reports said. The figures add to controversy about the government’s decision to end the resident non-domicile system.

The outflow is mainly to European nations such as Switzerland – already known as a jurisdiction attracting HNW individuals â€“ Italy, which has a residency system for wealthy foreigners, along with the United Arab Emirates, which has developed a visa regime to attract international talent. The exodus is particularly marked among the richest residents in the UK, with 78 centi-millionaires (those with at least £100 million ($121.7 million) and 12 billionaires leaving last year, The Times (of London) reported on Saturday. The publication cited figures from New World Wealth, an analytics firm.

The exodus of non-doms accelerated after the results of the 4 July 2024 general election. The report noted figures from HM Revenue & Customs, stating that there were 74,000 non-doms paying an annual £30,000 levy to keep the remittance basis status, and keep offshore and income outside HMRC’s grasp.

The report said a survey of more than 700 non-doms or their tax advisors by Oxford Economics found that that almost two-thirds of them were planning to leave or thinking of doing so because of the changes. 

Instead of the non-dom system, the UK will move to a residency system under which a foreigner, or UK citizen who has been outside the UK for at least 10 years, can bring wealth into the country and pay no tax for four years. This news service has carried a number of different views on the potential fallout, such as here, here and here.

At the heart of the controversy is whether, in a drive to make the UK tax system appear more fair, policymakers have shrunk the tax base by encouraging wealthy people to leave or not enter the country in the first place.