UK’s Tax Reforms Trigger Historic Flight of Millionaires
15.07.2025
Original Publication
WealthPlanning
UKTaxReform
PrivateWealth
InternationalTax
In 2025, the UK unveiled a series of far-reaching tax reforms that are transforming the financial landscape for high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs). From abolishing the Non-Dom regime to expanding global tax exposure have prompted a wave of strategic relocations and wealth restructuring, as affluent families reconsider their long-term future in Britain.
At the core of this shift are four key changes that have significantly altered the UK’s appeal to internationally mobile wealth-holders:
• Abolition of the Non-Dom Regime: The end of the remittance basis means all UK tax residents will now be taxed on their worldwide income and gains, removing a key incentive for internationally mobile families to remain in Britain.
• Expansion of Worldwide Taxation: UK tax residents face increased scrutiny and liability on global assets, making wealth structuring more complex.
• Rising Capital Gains and Inheritance Taxes: Capital gains taxes have increased, and inheritance tax (IHT) thresholds remain frozen until April 2030, meaning more estates will be subject to IHT as asset values rise.
• Shift from Domicile to Residence-Based IHT: From 6 April 2025, IHT liability is now based on residence. Those who have been UK tax residents for at least 10 out of the last 20 years (“Long-Term Residents”) are subject to UK IHT on their worldwide estate, regardless of domicile status.
Consequences for Wealthy Families
The Henley Private Wealth Migration Report projects that 16,500 millionaires will leave the UK in 2025, taking an estimated USD 92 billion in assets with them. This historic outflow of capital and talent, driven by the urgency to optimize tax exposure and preserve wealth is reshaping the UK’s position as a destination for global investors.
Increasingly, wealthy families are relocating to more favorable jurisdictions such as Switzerland and Dubai. As a result, the UK is becoming less attractive for investment and entrepreneurship, raising concerns that the country is turning increasingly inward and overly reliant on taxing domestic wealth. While the government anticipates higher tax revenues from these reforms, many argue that the departure of wealthy residents and their capital could ultimately undermine the UK’s long-term economic and fiscal goals.
Switzerland: A Solution for UK Wealth Migration
For many departing UK-based families, Switzerland is emerging as a natural next step offering both tax advantages and long-term stability:
• Stable, Predictable Taxation: Competitive income and wealth tax rates, no federal capital gains tax on most private assets, and attractive cantonal incentives.
• Political and Economic Security: Switzerland’s neutrality, legal certainty, and robust financial regulation offer long-term security.
• World-Class Wealth Management: Expertise in cross-border structuring, succession planning, and multi-jurisdictional solutions.
• Exceptional Quality of Life: Top global rankings for safety, healthcare, education, and lifestyle.
Trust and Wealth Planning Solutions
With the UK’s tax rules now residency-based, wealth structuring needs to adapt, especially for those leaving the UK.
• Discretionary Gift Trusts: These trusts remain flexible and are favored for cross-border wealth transfers. While assets are kept outside of beneficiaries’ estates, the settlor’s “Long-Term Resident” status now means ongoing IHT charges may apply even after leaving the UK.
• Excluded Property Trusts: Historically used by non-doms to shield overseas assets, these trusts lose their effectiveness for trusts established or funded after October 2024 if the settlor becomes a Long-Term Resident. Timing and residency history are key to maintaining excluded property status.
• Absolute/Bare Gift Trusts: Simpler trusts allowing for straightforward transfers; assets are outside the estate after seven years, classified as Potentially Exempt Transfers (PETs) if the settlor survives that period.
• Life Assurance Bonds: Offshore bonds (such as those from the Isle of Man or Ireland) can grow tax-deferred and may stay outside the scope of UK IHT for up to 10 years, offering significant estate planning advantages depending on the individual’s residence history and other criteria.
Gifting and Inheritance Tax Essentials
• Lifetime Gifts to Individuals: Most direct gifts are PETs; no IHT is due if the donor survives seven years after gifting. Death within this period may trigger IHT, with relief after three years.
• Trust Settlements: Transfers into certain trusts can trigger immediate IHT charges as Chargeable Lifetime Transfers (CLTs), especially for amounts exceeding the nil-rate band. The cumulative impact of multiple gifts and settlements over time must be carefully managed.
• Long-Term Residence Impacts: With IHT now tied to residency, worldwide estate exposure increases, adding complexity to all gifting and trust strategies for current or future Long-Term Residents.
The Need for Holistic, Integrated Planning
A single solution, trust, bond, or investment structure rarely covers every need. Instead, a comprehensive strategy blending trusts, gifting, insurance, investment structuring, and residency or relocation planning is essential. Legal, tax, and financial specialists must collaborate to optimize outcomes under the UK’s new rules, and to stay ahead of further regulatory changes.
Opportunities for Swiss Wealth Managers
Swiss advisors are uniquely positioned to help families navigate this new terrain. With expertise in:
• Trust and cross-border structuring
• International investment strategies
• Residency and succession planning
• Integrating insurance bonds with trusts
Wealth managers must now provide multi-layered solutions tailored to each client’s personal and tax situation.
Moving Forward: Take Action Now
With the UK’s new tax regime in force, wealth structuring is now more nuanced, international, and urgent than ever. Early, coordinated planning using trusted legal, tax, and fiduciary partners is vital for protecting global wealth.
If you need to:
• Reassess trust structures in light of the new residence-based IHT regime
• Explore tax-efficient relocation or investment strategies in Switzerland
• Integrate insurance bonds or cross-border vehicles into your planning
Speak to our Geneva-based team for a confidential discussion and coordinated access to the right professionals for your unique needs.
