UK’s Tough New Taxes Are Pushing the Rich Out — A Big Warning for Indian Millionaires
The United Kingdom is suddenly becoming a far less comfortable home for the world’s wealthy.
With the Labour government rolling out aggressive new tax rules, many super-rich individuals — including Indian-origin billionaire Lakshmi N. Mittal — are now considering leaving the UK after decades.
And the reason is simple: the cost of staying wealthy in the UK has shot up.
The Breaking Point: UK Ends Its Famous Non-Dom Regime
For years, the UK attracted global millionaires through its non-domicile policy that allowed foreign income to stay untaxed.
But from April 6, 2025, the game changes completely:
- The non-dom regime ends
- The UK shifts to residence-based taxation
- All global income and gains become taxable once you become a UK resident
For wealthy families who built their plans around offshore earnings, this is a major blow.
Capital Gains & Business Reliefs: Higher Costs, Fewer Benefits
The UK has also increased capital gains tax:
- 18% for the lower band
- 24% for higher-rate taxpayers
Business asset disposal relief — once widely used by entrepreneurs — is being phased out.
Gains on carried interest will rise to 32% by 2025–26.
Inheritance Tax: The Biggest Shock for Indian Families
The strictest changes are in inheritance tax (IHT):
- A steep 40% tax applies on estates above the threshold
- From 2027, inherited pensions will also be taxed
- Business & agricultural property relief is capped at £1 million
- Long-term residents (10 out of last 20 years) face IHT on worldwide assets
For wealthy Indians thinking of settling in the UK, this is a major red flag, especially when India has zero inheritance tax.
Property Owners Also Face Higher Charges
Wealthy property owners will feel the heat too:
- Higher stamp duty on additional homes
- Non-residents disposing of UK property must pay capital gains tax
- Strict reporting requirements
Why This Matters for Indian HNIs
Tax experts warn that someone with assets worth
₹200 crore
could face far higher lifetime tax erosion in the UK than in India.
India may have its own complexities, but:
- Preferential long-term capital gains treatment
- Reinvestment benefits
- No inheritance tax
…make it comparatively friendlier for long-term wealth protection.
The Shift Has Already Begun
Advisers are seeing the early signs: UK capital gains tax receipts have reportedly dropped by nearly £1 billion, signalling that wealthy families are moving money — and themselves — out.
Destinations like Dubai and Singapore are becoming preferred alternatives.
Conclusion
The UK, once considered a tax-efficient and stable base for the global elite, is changing fast.
For wealthy Indians planning to move there, these reforms are a strong warning:
The UK is no longer the safe, tax-friendly haven it used to be.
Careful planning — or rethinking the move — is now essential.