Britain risks accelerating the “largest millionaire exodus in the developed world” if the next Labour leader pursues wealth taxes and exit taxes to plug mounting holes in the public finances, warns the CEO of global financial advisory giant deVere Group.
The warning from Nigel Green comes as growing speculation over Sir Keir Starmer’s future fuels concerns among investors and entrepreneurs that Labour could shift further towards policies targeting wealth, assets and capital.
The UK is already projected to lose 16,500 millionaires this year, more than any other country on the planet and the largest annual outflow ever recorded by the Henley Private Wealth Migration Report. Those departing individuals are estimated to control almost $92 billion of wealth.
Nigel Green says: “Britain is already experiencing a significant wealth exodus. The country is losing more millionaires than China, Russia, or any other major economy. The idea that policymakers could respond to this by introducing wealth taxes, exit taxes or further punitive measures aimed at successful individuals is deeply concerning. It would risk accelerating a trend that is already gathering pace.”
The comments come as several figures linked to a potential future Labour leadership contest have openly discussed higher taxation on wealth, assets and capital gains, while pressure continues to mount on the government to find new sources of revenue amid stretched public finances and rising borrowing costs.
“The political incentives are obvious. Taxing wealth is often presented as an easy solution to difficult fiscal challenges. The problem is that wealth is mobile. Successful entrepreneurs, investors and internationally connected families have options. Capital has options. The UK is no longer competing only with neighbouring European countries. It is competing with jurisdictions actively attracting wealth, talent and investment.”
The UAE is forecast to attract almost 10,000 millionaires this year, while countries including Spain, Italy, Switzerland and Singapore continue to market themselves aggressively to globally mobile investors and business owners.
Nigel Green says: “Britain is facing a global competition for capital and talent. Other countries are offering incentives. They are creating attractive environments for entrepreneurs and investors. A wealth tax sends precisely the opposite message. It tells wealth creators they are increasingly viewed as a revenue source rather than an economic asset. Governments often focus on what they might collect from a wealth tax. They spend far less time considering what they might lose.”
He argues that the growing discussion around potential exit taxes is especially alarming.
“An exit tax changes the relationship between citizens and the state. It effectively tells people that even if they choose to leave, the government still intends to claim a share of the wealth they have built. For internationally mobile individuals, that becomes a powerful incentive to reconsider their position before such measures are ever introduced.”
The international record on wealth taxes should serve as a warning.
Across the OECD, many countries have abandoned broad wealth taxes over the years because they proved difficult to administer, generated disappointing revenues and encouraged capital flight.
“Supporters often focus on theoretical revenues. Real-world results have frequently been far less impressive.”
The deVere CEO believes Britain is approaching a critical moment.
“Investors are already reassessing whether the UK remains a competitive place to build businesses, create wealth and invest for the future. The loss of wealthy individuals matters because they do not leave alone. They take investment capital, entrepreneurial activity and future economic growth with them. The damage is not confined to a small group of affluent people. It spreads across the wider economy.”
Nigel Green concludes: “The next Labour leader is likely to face intense pressure to raise additional revenue. Wealth taxes and exit taxes may appear politically attractive. The economic consequences would be severe. Britain already leads the world in millionaire departures.
“Introducing new taxes on wealth while other countries actively court investors would be pouring fuel on a fire that is already burning. The result would almost certainly be a faster outflow of wealth, weaker investment, slower growth and a smaller long-term tax base. At a time when Britain needs more capital and more enterprise, the last thing it should be doing is giving wealth creators another reason to leave.”
