The UAE’s zero tax and expat-friendly regulations continue to attract UK millionaires.
Despite the British government’s move to slow wealth migration, a noticeable trend that continues to gain impetus is that a rising number of UK millionaires are set to relocate to Dubai and Abu Dhabi. The UAE is all set to welcome a record-breaking influx of high-net-worth individuals (HNWIs) this year, nearly double last year’s figures.
This migration is part of a more significant trend, with the scale of wealth transfer second only to China’s anticipated loss of 15,200 millionaires.
The UAE’s charm for UK millionaires can be attributed to several factors, primarily the emirate’s zero-income tax policy compared to the UK’s increasing tax burdens. The UAE’s tax laws offer a noteworthy financial incentive for wealth preservation and growth, and the Golden Visa program offers long-term residency options. The UK government’s efforts to stem this exodus, including recent amendments to non-domiciled (non-dom) tax rules, have failed to stop this exodus.
The UK government plans to abolish the non-dom regime starting in April (this year) and offer more generous temporary repatriation facilities. However, these measures have not found much favor with the non-dom community, as their long-term implications are debatable.
The economic influence of this migration remains substantial for both the UK and the UAE. The UK is grappling with losing significant investment potential and tax revenues. Conversely, the UAE will benefit from improved capital inflows and economic diversification. HNWIs will boost various sectors in the UAE, particularly luxury real estate, financial services, and high-end retail.
As wealth migration underscores the global competition to attract HNWIs and the challenges nations face trying to balance tax revenues, the UK and the UAE will consider policies favorable to wealthy residents and introduce more reforms to address this continual shift in global wealth distribution.
