The UK faces a record wealth exodus of high net worth individuals, driven by tax reforms and shifting global incentives. This trend brings challenges and opportunities for Independent Financial Advisers (IFAs) working with expats. With destinations like Dubai, Italy, and Monaco luring high-net-worth individuals (HNWIs) with low taxes and lifestyle perks, IFAs must adapt to meet the evolving needs of globally mobile clients.
Why Are HNWIs Leaving the UK?
The upcoming abolition of the UK’s non-dom tax status in April 2025 is a major catalyst. For decades, this rule allowed individuals to shield foreign income from UK taxation for up to 15 years—a significant benefit now set to disappear. Combined with rising concerns about inheritance tax changes, many HNWIs see greater appeal in relocating to jurisdictions with more favourable tax regimes.
Countries like Italy, offering a flat tax for newcomers, and Dubai, with zero personal income tax, are becoming hubs for affluent expats. Cultural perks, business opportunities, and exclusive lifestyles only add to their allure.
What Does This Mean for IFAs?
For advisers, the exodus underscores the need to tailor financial strategies to clients who are considering—or have already—moved abroad. Expats often require bespoke advice on cross-border tax planning, inheritance strategies, and investment solutions that align with their new residency.
Additionally, the UK’s proposed tax regime change in April 2025 could present opportunities to attract or retain clients. The new rules will allow four years of unrestricted remittance and spending of offshore income without additional tax exposure. While not as robust as Italy’s 15-year certainty, this initiative may appeal to transient wealthy individuals seeking temporary UK residency.
Navigating Cross-Border Wealth Management
As the exodus of wealthy individuals continues, IFAs have an opportunity to strengthen their value by offering tailored cross-border wealth management services. Advising expats isn’t just about tax efficiency—it’s about crafting holistic strategies that account for international laws, asset protection, and long-term planning across multiple jurisdictions.
One area of focus is optimising global investment portfolios. Expats often maintain assets in their country of origin while acquiring new ones abroad, such as property or business interests. Advisers can help clients navigate the complexities of managing a diversified portfolio across different regulatory environments, ensuring tax compliance and maximising returns.
Estate planning is another critical component for expats, especially as they adjust to new inheritance tax laws in their host countries. By addressing international inheritance and succession regulations, IFAs can protect family wealth while mitigating exposure to costly estate taxes.
Currency management is also a growing concern for globally mobile clients. Shifts in exchange rates can significantly impact the value of cross-border investments or income streams. Offering solutions like multi-currency accounts or hedging strategies can help safeguard clients against currency risk.
Lastly, it’s essential for advisers to stay informed about changing tax regimes, both in the UK and in popular expat destinations. As jurisdictions compete to attract wealth, staying ahead of the curve allows IFAs to provide clients with proactive strategies, such as taking advantage of new tax benefits or transitioning wealth effectively between countries.
For IFAs, navigating this dynamic landscape requires a deep understanding of global financial trends and a client-first approach that addresses the complexities of international living. By mastering these challenges, advisers can position themselves as indispensable partners for expats managing wealth in an increasingly interconnected world.
The Role of IFAs in Navigating Global Moves
As expats adjust to life abroad, they depend on IFAs to provide clarity amidst complexity. From advising on offshore accounts to managing investments in multiple jurisdictions, IFAs can position themselves as trusted guides in this new era of wealth mobility.
With significant changes on the horizon, the question remains: will the UK’s new tax framework retain or replace its departing HNWIs? For IFAs, the focus should be on staying ahead of these shifts, ensuring that clients—no matter where they call home—receive expert advice tailored to their evolving needs.
Would you like to explore how Lawsons Network can support your advisory practice as global trends reshape the financial landscape? Let’s start the conversation.
