10,800 millionaires left the UK during 2024, including 78 centi-millionaires and 12 billionaires.
According to data compiled by Henley & Partners, one millionaire left the UK every 45 minutes. Only China saw more millionaires depart during the same period.
Shortly after this data was released, UK chancellor Rachel Reeves spoke at the World Economic Forum in Davos. “We have been listening to the concerns that have been raised by the non-dom community,” she said. And stated that she would revise some of the non-dom tax reforms.
Meanwhile, a treasury spokesperson said that the changes are not expected to alter the anticipated £33.8 billion that the government hope to raise from non-dom tax over the next five years.
Quite the saga – timeline of events for non-dom tax reforms
While this news may be too little too late for some, here’s the timeline of events and an outline of the non-dom tax rules and proposed changes:
- In March 2024, then Tory chancellor Jeremy Hunt announced the non-dom tax regime would be phased out.
- The Conservatives proposed new rules, meaning that:
- From April 2025, people who moved to the UK would not have to pay tax on money they earned overseas for the first four years
- If they continued to live in the UK, after four years, they would pay the same tax as everyone else
- Existing nom doms would be allowed a two-year transition period, during which they would be encouraged to bring their foreign wealth into the UK.
- In the run up to the UK general election, Labour said it would toughen Tory plans to abolish non-dom tax status.
- In her maiden Budget in October 2024, Reeves confirmed that:
- The tax regime for non-doms would be abolished from April 2025, claiming that the rules will ensure that those who “make the UK their home will pay their taxes here”.
- She would introduce a residence-based scheme with “internationally competitive arrangements” for those coming to the UK on a temporary basis.
Closing the stable door after the horse has bolted
At the end of January, Reeves confirmed that she would “tweak” the transition period, allowing people more time to bring their money into the UK, and allow them to pay lower tax on their overseas income for the next three years.
With thousands of millionaires already voting with their feet, it’s hard to see how Reeves’ recent promise to relax non-dom tax rules will tempt wealthy individuals to make their home in the UK.
Meanwhile, some experts say more joined-up thinking would make it easier for millionaires to choose the UK as their home and contribute to the economy. It’s also been suggested that Donald Trump’s presidency presents more scope to attract at least some wealthy people back to the UK.
Singapore is among the most popular destinations for UK expats
With so many taxing (and political) problems besetting both the UK and US, it’s no surprise that wealthy individuals are weighing their options.
With low taxes, high salaries, and lavish lifestyles, Singapore presents an attractive alternative.
One of Asia’s key business hubs, it’s an ideal location for wealthy expats. That said, for those considering relocating abroad, there are some key financial considerations to address.
4 financial steps to consider before you relocate to Singapore
1. Understand the tax implications
A double taxation agreement between the UK and Singapore means that once you’ve paid taxes in Singapore, you won’t get taxed twice on the same income.
You’re required to pay taxes if you work in Singapore, but Income Tax rates are significantly lower than in the UK. The extent of your tax liability will depend on your tax residency status. This is something we can advise on.
Depending on your circumstance, you may choose to continue to pay National Insurance while living in Singapore to protect your State Pension, as well as other potential benefits and allowances. Again, this is something we can help you to understand.
2. Plan ahead
Think about what insurance protection you need before you move. It may be possible to change the terms for some of your existing policies, but health insurance should be among your top priorities.
Other areas to plan before you make your move include:
- Opening a bank account – It may be prudent to maintain at least one bank account in your home country.
- Evaluate income and cost of living – It’s vital to know how your earnings might adjust and what your net income is likely to be, especially if it will be converted from a different currency.
- Review your savings and investments – You may have tax-efficient savings and investments in the UK that may not be transferable outside the country. Depending on your portfolio, you may need to reassess how you invest your wealth.
3. Think about your pension savings
If you’re a British expat, you’ll normally remain eligible for the State Pension. However, you won’t receive an annual payment increase. This means that the amount you are paid will remain the same for the duration of your retirement, unless you move back to the UK or another country within the EU or one with an agreement with the UK.
When it comes to your private pension, you could opt to:
- Keep your pension savings in the UK and accept any potential currency exchange risk.
- Transfer your pension to an appropriate overseas scheme.
- Reinvest pension funds in a tax-efficient plan or choose an alternative investment approach.
You’ll need to weigh up all your options with care, especially if your move is part of your long-term retirement plan. This is an area we can help with.
Find a reputable expat financial advisor in Singapore
Unlike the UK, the financial advice market in Singapore is predominantly a sales industry. Product providers in Singapore employ direct salespeople to sell commission-based plans, regardless of what is right for you.
It’s wise to keep this front of mind as you navigate your new financial life on fresh shores.
At Ascenta, we embrace lifestyle financial planning. Instead of focusing on what products we can sell you, we look at your lifestyle, goals and aspirations, tailoring advice and solutions to meet your exact requirements.
As fellow expats, we’ve experienced the highs and lows of living overseas. So, we know what works financially and the pitfalls you should avoid.
Speak to your planner today to learn more about the UK non-dom tax changes and how we can help you make a positive and prosperous move.
