A growing number of high-net-worth individuals (HNWIs) are turning their backs on Britain in favour of more financially attractive destinations, with Portugal topping the list.
This shift comes as the UK Government introduces sweeping tax reforms and refuses to rule out the introduction of a controversial wealth tax.
Tax Reforms Reshape the Financial Landscape
In 2025, the Labour Government implemented major tax changes, including the abolition of the long-standing non-domicile (non-dom) tax regime and the extension of inheritance tax to offshore trusts. These reforms have significantly reduced the financial advantages once enjoyed by non-residents and non-domiciled individuals, effectively aligning their tax treatment with that of UK residents.
Adding to the unease, the Government has refused to eliminate the possibility of a new wealth tax. Despite widespread concerns from tax professionals about the negative impact such a tax could have—both in terms of revenue and investor flight—Treasury officials remain firm.
A Downing Street spokesperson reaffirmed this in early July, saying: “We have repeatedly said those with the broadest shoulders carry the greatest burden and the choices we have made reflect that.”
The Government is under increasing fiscal pressure following the reversal of welfare reforms, leaving Chancellor Rachel Reeves with a £5 billion budget shortfall. Some economists estimate the true gap could exceed £20 billion if growth forecasts deteriorate further.
Chief Secretary to the Treasury Darren Jones has indicated that decisions regarding taxation will be clarified during the autumn budget, saying, “the Chancellor will set out any decisions on tax one way or the other at the budget.”
Record Numbers of Millionaires Leaving the UK
As a result of these policy shifts and ongoing speculation, Britain is experiencing an unprecedented outflow of wealthy individuals.
Research by New World Wealth projects that 16,500 millionaires will leave the UK in 2025—a 53% surge from 2024’s estimate of 10,800 and the largest single-year departure recorded for any country.
Among those reportedly exiting the UK are Aston Villa FC co-owner Nassef Sawiris and billionaire property developers Ian and Richard Livingstone, according to reports from The Financial Times and The Times.
Experts Warn Against Wealth Tax as Economic Blunder
The idea of a wealth tax has met widespread criticism from financial experts, who label it economically unsound. Historically, such taxes have tended to drive capital flight without generating meaningful revenue.
Paul Stannard, Chairman and Founder of the Portugal Investment Owners Club and Portugal Pathways, stated: “It’s simple. If the UK implements a wealth tax, high-net-worth individuals will leave the country.”
This warning is supported by global precedent. In Norway, an increase in the wealth tax to 1.1% prompted a significant exodus of affluent citizens, costing the government an estimated £435 million annually, according to IMI Daily.
The Cato Institute reports that of the 12 advanced economies that imposed wealth taxes in the 1990s, only three retain them today. The Institute for Fiscal Studies adds that most countries have since abolished them, with Switzerland being a rare exception due to its low overall tax burden.
Portugal as a Magnet for Mobile Wealth
As the UK becomes less appealing, Portugal has emerged as a hotspot for wealthy individuals seeking more advantageous tax conditions and lifestyle benefits. Over the past two years, more than 2,700 millionaires have chosen to relocate and invest in Portugal, according to Portugal Pathways.
The country’s IFICI (NHR 2.0) tax regime, introduced in January 2024, is proving highly attractive. Under IFICI, qualifying individuals pay no tax on foreign-sourced income—such as dividends and capital gains—and are subject to a flat 20% tax on Portuguese-sourced income.
For those looking to establish residency, Portugal’s Golden Visa residency-by-investment programme remains a compelling option. A €500,000 investment in an approved alternative investment fund qualifies HNWIs and their families for residency, granting them the freedom to travel across the EU.
Golden Visa holders need only spend seven days per year in Portugal to maintain their residency status, and the programme offers a clear pathway to citizenship after five years.
“Combining Portugal’s favourable tax environment and Golden Visa residency by investment programme with its climate, growing expat community, low crime rate, stunning beaches, culture, and geostrategic location, we’re seeing more HNWIs look to Portugal as a place to live and invest.” States Stannard.
Britain’s Loss, Portugal’s Gain
As the UK faces the potential long-term fallout of its shifting tax policy—including the loss of talent and capital—Portugal and similar hubs are positioning themselves to benefit. For wealthy individuals eager to protect and grow their assets, relocating abroad is increasingly being seen not just as a financial decision, but a strategic one.
About Portugal Investment Owners Club
The Portugal Investment Owners Club, or P Club for short, is a unique investor membership community designed for discerning individuals, families, and organisations committed to exploring and capitalising on life in Portugal and enjoying money-can't-buy experiences and exclusive events.
About Portugal Pathways
Portugal Pathways has supported hundreds of Golden Visa residency-by-investment applications and provides expert guidance through its professional supply chain network on luxury property, wealth management, and tax optimisation, including post-NHR tax regime planning, as well as private healthcare, IFICI tax incentive applications, money transfers and bespoke relocation solutions to enhance life and investments in Portugal.
Disclaimer: The information on the Portugal Pathways and Portugal Investment Owners Club (P Club for short) websites and in email communications is for general informational purposes only and should not be construed as legal, tax, or financial advice. You should consult and check with a qualified professional advisor before relying on any information provided on this website or in email communications. As it relates to investments in Golden Visas or other wealth management solutions offered by regulated and professional advisors, it is important to note that past performance is no guarantee of future returns. Private equities can be highly illiquid and come with risk and should always be under professional independent advice. Golden Visa investments need to be held for 6 to 7 years to allow for permanent citizenship/passport in the EU.
