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UK Government tax reforms and a refusal to rule out a new wealth tax are driving affluent Brits to seek friendlier financial climates abroad, with Portugal being the go-to destination.
Changes to UK tax policy
The Labour government's tax reforms in 2025, specifically the abolition of the non-domicile (non-dom) tax regime and the imposition of inheritance taxes on offshore trusts, have significantly altered the financial landscape for affluent Brits.
These changes have reduced the benefits previously available to non-residents and non-domiciled individuals, bringing their tax treatment closer in line with that of UK residents. This has significantly impacted many HNWIs who relied on the UK’s favourable non-dom regime.
Meanwhile, the UK government's refusal to rule out a new wealth tax is adding greater uncertainty.
Despite warnings from tax experts about the historical ineffectiveness and revenue-draining consequences new wealth taxes could bring, Downing Street and Treasury officials have consistently refused to dismiss the possibility.
In early July, a Downing Street spokesperson reinforced this stance, stating: “We have repeatedly said those with the broadest shoulders carry the greatest burden and the choices we have made reflect that.”
This comes amid mounting fiscal pressure on Chancellor Rachel Reeves, who faces a £5 billion shortfall after the government's welfare reform reversal.
Economists suggest she may ultimately need to find more than £20 billion if growth forecasts deteriorate.
Chief Secretary to the Treasury Darren Jones has stated that "the Chancellor will set out any decisions on tax one way or the other at the budget," scheduled for autumn.
The UK’s millionaire exodus
The immediate consequence of these policy shifts and ongoing speculation is a dramatic increase in the number of wealthy individuals leaving the UK.
High-profile departures include Nassef Sawiris, co-owner of Aston Villa FC, and billionaire property developers Ian and Richard Livingstone, according to The Financial Times and The Times.
Expert concerns and administrative hurdles
Tax professionals largely dismiss the idea of a wealth tax as economically naive, pointing to historical evidence that shows these taxes typically generate minimal revenue while driving away the very individuals they target.
Paul Stannard, Chairman and Founder of Portugal Pathways and Portugal Investment Owners Club, supporting HNWIs in relocating, investing, and living in Portugal, claims: “It’s simple. If the UK implements a wealth tax, high-net-worth individuals will leave the country.”
International experience supports this. IMI Daily reports that Norway’s recent wealth tax rate increase to 1.1% triggered a substantial exodus of wealthy citizens, resulting in a £435 million annual revenue loss for the state.
Meanwhile, the Cato Institute has found that of the 12 developed countries with wealth taxes in the 1990s, only three retain them today.
The Institute for Fiscal Studies notes that most countries that implemented wealth taxes have since abandoned them, with Switzerland being a rare exception due to its relatively low general tax rates.
Why Brits are leaving for Portugal
As the UK's appeal wanes, new investment hubs are gaining traction, offering favourable tax incentives and thriving ecosystems tailored to HNWIs. Portugal, in particular, has emerged as a favourite for UK expats and international wealth.
According to Portugal Pathways, over 2,700 millionaires have chosen to relocate and invest in Portugal over the last two years.
Portugal’s IFICI (NHR 2.0) tax regime, which officially began in January 2024, has proven a significant success in attracting high-skilled professionals, entrepreneurs, and investors.
Qualifying individuals for IFICI pay 0% tax on foreign-sourced income, such as dividends and capital gains, while paying a flat 20% tax rate in Portugal.
Meanwhile, HNWIs can qualify for Portugal’s lucrative Golden Visa residency-by-investment programme by investing €500,000 in a Portuguese Golden Visa-qualifying alternative investment fund(s).
Golden Visa status holders in Portugal enjoy residency and freedom of travel across the EU for themselves and their qualifying family.
The programme also provides a clear pathway to citizenship after five years, whilst only requiring Golden Visa holders to spend seven days per year in Portugal to maintain residency, making it ideal for globally mobile investors.
“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.
While the immediate fiscal and geopolitical costs are significant for Britain, the rise of alternative hubs like Portugal presents unique opportunities for forward-thinking investors to diversify their portfolios beyond the UK.
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.
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.
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.
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