Number of millionaires in the UK ‘to fall by a fifth’

The number of millionaires in the UK will fall by a fifth by the end of this parliamentary term, a larger proportion than in any other country, according to the Adam Smith Institute.
Today 4.55 per cent of British residents are millionaires. The neoliberal, free market think tank forecasts that this figure will fall to 3.62 per cent by 2028, however, while in Germany, France and Italy the proportion is expected to increase.
The think tank defines a millionaire as an individual who has at least $1 million in net wealth across all asset classes, including shares, property, pension funds and cash.
It said that millionaires were leaving the UK, or considering doing so, for a number of reasons, including changes to the non-domiciled tax status, which may lead to its abolition, and high levels of taxation.
About 74,000 people claimed non-dom status in 2022, according to official figures. A non-dom pays UK tax only on the money they earn in the UK. Money made outside the UK is exempt from UK tax unless it is paid into a UK bank account.
In March 2024 the Conservative chancellor, Jeremy Hunt, announced that the regime would be phased out, though people who moved to the UK from April 2025 would not have to pay tax on money they earned overseas for their first four years in the country. After that, they would have to pay the same tax as everyone else.
However, Labour said it would go further, removing a 50 per cent discount for non-doms bringing foreign income into the UK in the first year of the new rules coming into effect. The party said it would also include foreign assets held in a trust within the UK inheritance tax framework.
Furthermore, Sir Keir Starmer has cautioned that the budget in October is “going to be painful” and that people will be asked to “accept short-term pain for long-term good”. There is speculation that Rachel Reeves, the chancellor, could try to raise revenues by reforming capital gains tax, which at present is levied at a lower rate than income tax, and by making changes to inheritance tax.
Nadhim Zahawi, the former chancellor, called on Reeves to scrap policies aimed at reforming non-dom rules and to ease taxes on wealthy individuals in the upcoming budget.
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He said: “The rate at which millionaires are leaving the UK is a vote of no confidence in both our current tax and regulatory regime and anti-business and anti-prosperity measures that could be coming down the line. These individuals are often entrepreneurs and business owners. Their exit won’t just reduce necessary funds for public services, it will decrease investment in the wider economy too.”