Also, with significant changes to the non-judgmental tax system, many are rethinking their future in the UK.
Tax changes: End of non-judgmental status
For decades, foreign nationals have benefited from the UK's favorable tax system, which has allowed them to pay tax only on income they bring into the UK rather than worldwide income. However, reforms due to come into effect in April 2025 will put an end to this preferential treatment. UK Chancellor of the Exchequer Rachel Reeves has announced that the non-judgmental regime will be scrapped and replaced with a citizenship-based system that taxes individuals on their worldwide income.
David Lesperance, a tax and immigration planning expert, noted that the changes meant many wealthy residents were planning to leave the UK. “The rich are already ready for changes and need to adapt quickly. We are in daily contact with those who want to protect their wealth for future generations and help them implement a solid plan with reliable backup. Legislators are capricious. People with funds are on their guard and planning for multiple contingencies,” explained Lesperance. The rules, the end of the remittance basis, are expected to generate significant additional tax revenue, but have raised concerns about an exodus of affluent residents.
A rise in the cost of living and inheritance tax
The cost of living in London and other major British cities has risen, prompting many Britons to seek more affordable options abroad. Combined with high inheritance tax rates, financial pressure is prompting many to reconsider their long-term residence permit. Inheritance tax, currently at 40%, is one of the highest in the developed world, making it more difficult for UK residents to protect their wealth.
A combination of these factors has made jurisdictions such as Portugal and Italy attractive options, offering highly favorable tax structures for expats. For example, Italy's flat tax system allows residents to pay a flat tax of €100,000 on all foreign income, while Portugal has well-established advantages.
Security risks and the impact of Brexit
Security issues also play a role, with crime on the rise in the UK's major cities prompting some people to seek safer surroundings. Brexit has left many Britons eager to reclaim their rights from the EU. Since the UK left the EU, British citizens have lost their freedom to live, work and travel freely within Europe. This loss of mobility is a particularly severe blow to those who travel frequently or have business interests in the EU.
Expert Insight: Explore new opportunities abroad
Mark Penny, Managing Director of SunCap Visa(www.suncapvisa.com)Commented: “Many Brits, or non-doms, see moving abroad not just about tax savings; it's about quality of life, access to global markets and securing a stable future for their families. With the rising cost of living and uncertainty around taxes, people in Europe and other countries are increasingly opting for alternatives. are key factors in finding ways.”
Local property guru Alexandra Bonte of Bonte Filipidis (www. bontefilipidis.com) agrees, “UK investors are increasingly drawn to areas such as Lisbon, Cascais and Estoril for their vibrant city life, access to top international schools and proximity. These destinations not only offer a coastal lifestyle but a rich culture. They also offer ambiance and make them ideal for families looking for a well-rounded lifestyle with strong educational options.
Investor Preferences: Diversification and Flexibility
For investors moving to Portugal and Italy, the decision is not just about taxes, but about diversification and long-term stability. Michael Maxwell, founder of Portugal Panorama and Ariate Capital(www.portugalpanorama.com And www.arietecapital.com)Many Golden Visa-eligible investments have started in both jurisdictions, it explains: “Investors are looking for flexibility in how they allocate their capital, diversification of assets across different markets and a country with a strong history of respecting investors' rights. Most importantly, they want security – the changing and uncertain regulation in the UK Contrary to the framework, there is no golden visa risk or sudden political changes that could affect their residency”.
The way forward
Due to changes in the non-judgemental tax system and other financial pressures, many wealthy UK nationals are reconsidering their residency status. Countries with favorable tax rules and investment visa schemes will continue to attract those seeking to escape the UK's increasingly harsh tax environment and regain the global mobility they once enjoyed as EU citizens. As the world becomes increasingly connected, these high-net-worth individuals are looking for new opportunities that offer both financial benefits and diversification, but also opportunities to leave a legacy and legacy for future generations.
Contact details: Michael Maxwell
Michael Maxwell – Founder
Portugal panorama
+351 965 592 312
Warning:
The views expressed on this page are those of the author and not The Portugal News.
More Stories
UK expands military contract with Saab
Saab receives more orders for training systems from the UK
Saab receives more orders for training systems from the UK