Private wealth in motion: The great exodus
As the global population of high-net-worth individuals (HNWIs) grows and their wealth expands1, the world is on the cusp of the largest intergenerational transfer of family wealth in history – all set against a backdrop of profound uncertainty. While private wealth continues to burgeon, the economic situation of some major countries languishes and, as a consequence the world is witnessing an unrivalled migration of HNWIs. This multifaceted shift of wealth is taking place in a global unstable climate, where some governments tend to redefine the “contrat social” through major reforms (including the review of domestic tax regimes). The quest for stability and safeguarding of assets, prompting the relocation of HNWIs, might impact some European traditional “capitals of wealth” – and also generate opportunities.
This introductory article of a series devoted to some of the current key trends, opportunities and challenges of the international wealthiest families aims to unravel a complex myriad of factors influencing the migration of HNWIs, examining the interplay between economic stability, tax regimes, quality of life, and geopolitical dynamics.
Supported by the strong performance of the financial markets, the number of wealthy individuals and their fortune grew in recent years. This trend has resulted in a surge of Ultra HNWIs, who, while making only 1.1% of the global HNWIs population, hold assets exceeding USD 49 trillion in value – an amount surpassing the combined gross domestic product (GDP) of China and the United States (US)2. However, in the coming years, the increase in HNWI numbers is expected to stem largely from the extraordinary transfer of wealth accumulated by Baby Boomers during the prosperous post Second World War era ("Trente Glorieuses"): the so-called “Great Wealth Transfer”3. Over the next decades, an extraordinary USD 83.5 trillion of private wealth4 is intended to pass down from the richest generation in history to the next generations . In this context, now and in the near future, the main challenge of HNWIs globally will be to organise the transfer, protect and be in a position to continue to grow their estates amidst political and economic instability - and to seize opportunities allowing them to reach these objectives.
In 2024, with more than 75 countries which held major elections, representing more than 50% of the world's population, the number of elections worldwide has reached a record as historic as the "Great Wealth Transfer"6. This unprecedented electoral wave since the creation of universal suffrage occurred in a post-pandemic context where armed conflicts are affecting the global economy.
Some established economic hubs seem to face significant challenges leading to sensitive decisions to make up for public deficits. In some cases, HNWIs may be victims of the reshaping of the social contract for which they may have the feeling to pay the (tax) price. Together with other factors including political (in)stability, domestic security, quality of infrastructures and education or health offering, some tax reforms are causing HNWIs to wonder about the jurisdictions (and sometimes the regions) where their future will be shaped (both for their personal residency and the jurisdictions where they will hold and manage their assets going forward).
The nervousness of the wealthiest in the face of political and economic instability led already to the relocation of an unprecedented 128,000 HNWIs in 20247. This reshaping of the private wealth landscape should even be exacerbated with at least an additional 135,000 HNWIs expected to flee in 2025 from their home jurisdictions for more favourable lands. Some countries may bear the cost of this exodus – two of them being the United Kingdom and France.
What is the genesis of the migration of HNWIs and which European jurisdictions are likely to be most affected?
United Kingdom and economic instability
When considering HNWIs in Europe, the United Kingdom (UK) and particularly London, stands out. The City's ascent as a private wealth capital is rooted in its financial history, cultural depth, and opulent lifestyle. The Bank of England's founded in 1694 laid the groundwork for London's financial services, which expanded to meet the British Empire's demands, leading to the birth of modern private banking. The City has since become a financial titan, with deregulation in the 1980s propelling it into a new era. London's allure for HNWIs extends to its luxury living, with a vibrant art scene, high-end accommodations, a luxury property market and an unparalleled domestic network of banks and financial institutions all enhanced by a favourable tax regime for non-domiciled residents (UK non-dom regime), cementing its status as the European Capital of wealth. This unique centuries-old tax regime allows individuals (i.e. non-doms) who are tax resident in the UK but not domiciled therein to be taxed only on their domestic income/gains and overseas income/gains only if repatriated to the UK (i.e. so-called “remittance basis”) for a maximum period of 15 years (also applied for inheritance tax purposes on non-UK situs assets). The regime is predominantly used by high-income earners (and a small portion of rentiers)8 of whom more than 50% are living in London9, a city of “residence” for more than 225,000 HNWIs in 202310.
However, since the 2008 financial crisis, the UK, home to Europe's top financial centre11 and 651,700 HNWIs as of 202312, has seen its competitiveness slowly decline, a situation exacerbated by Brexit and the Covid-19 pandemic. This reduced appeal has prompted 16,500 HNWIs to leave between 2017 and 202313, with no immediate signs of recovery. In its first Budget in 14 years, the Labour Government confirmed a sweeping reform of the long-standing UK non-dom regime, initially announced by the Conservatives to address the GBP 22 billion “black hole” in public finances. This race to bail out may not have the desired effect by driving HNWIs benefiting from this scheme to flee the country. According to Oxford Economics, 63% of non-doms are considering a move abroad within two years14. While taxes are not the sole reason for their departure15, they remain a significant factor16 pushing individuals to relocate for more favourable lands17. The anticipated exodus, potentially reaching 9,500 by 202418, could impact the British economy, defying government expectations. Indeed, in 2023, non-doms, though just 0.1% of the UK population19, contributed GBP 8.9 billion in (income and capital gains) taxes and national insurance contributions20, accounting for 1.9% of total income generated by the administration on such taxes21. This willingness to relocate is exacerbated mainly by the reform of the inheritance tax, leading non-doms to be subject to such tax
The departure of HNWIs from the UK could further strain the nation's faltering economy by driving away a skilled and entrepreneurial group along with their substantial (fiscal) contributions. Indeed, this migration out of the British territory may lead in the (near) future to a pure loss of revenues for the country, estimated at GBP 900 million by 2029/2030 in the worst scenario22. Concerned by the exodus of its wealthiest taxpayers, the UK Chancellor announced at the World Economic Forum in Davos a “generous” temporary repatriation facility23. But is not that too little, too late?
Questioning on France’s political steadiness
Across the Channel, the aftermath of the European legislative elections in June 2024 has plunged France into a period of political uncertainty, marked by the dissolution of Parliament and the appointment of two new Prime Ministers in just a few months. This instability is set against a backdrop of economic stagnation and poorly managed public indebtedness challenging the nation's ability to make decisive policy decisions, as evidenced by the contentious debates over the 2025 budget bill. The French government's response, particularly the expected introduction of exceptional tax measures targeting not only the wealthy but also the upper-middle class and large companies, would be a direct consequence of the need to address the growing public deficit, which lags increasingly behind the Eurozone average24. These fiscal pressures, combined with the world's highest inheritance and gift taxes and rising inflation, paint a picture of a nation struggling to balance its books, with the affluent being called upon to shoulder a significant portion of the burden.
As a consequence, wealthy French individuals are assessing all their options (including a potential relocation). However, a departure is not always easy to organise and mainly depends on the profile of the HNWIs and the composition of their wealth.
Mobility as key factor of the Great Wealth Migration
Even with instability and uncertainty commonly underpinning this global movement trend, the decision to relocate remains personal and contingent on each individual’s circumstances. Factors such as the composition of the wealth, location of (private/familial) assets, active involvement in asset management and personal ties of HNWIs with the jurisdiction where they are currently located emerge as essential considerations for assessing HNWIs’ capacity of mobility for relocation purposes.
Despite each individual’s unique situation, certain “categories” may be identified within the HNWIs population. As an illustration many UK based HNWIs have a significant part (if not all) of their wealth located outside of the UK. This is especially the case for individuals benefiting from the UK non-dom regime. Bearing in mind the fact that most of these families are not originally from the UK, it makes a smooth exit out of the country easier – even though the holding and management of “offshore” assets further to the exit still need to be carefully reviewed and analysed in light of the jurisdictions where the (ultra) HNWIs will become tax resident and where the assets are located. That being said, the personal situation of families (including children at school – if applicable) remains a topic to be taken into consideration. Families intending to stay in the UK should ideally undertake a minima a review and reorganisation of their estate by April 2025 (e.g. realisation of latent capital gains, review of trust structures, etc).
In France, the circumstances are generally different. While it is more difficult to access recent data, it seems that the exodus has not really started yet. Wealthy families still resident in France are currently busy in analysing their options. That being said, most of them are French nationals having still (strong) ties with the country. They may still own and manage French-headquartered group(s) which usually represent a significant portion of their wealth. In that case, the migration may be a challenging exercise. Additional bad sign – prominent French entrepreneurs are currently commenting on the potential exceptional tax25 which may be introduced for domestic companies having realised a turnover exceeding EUR 3 billion. This may increase the risk of relocation of some prominent French companies. For those having already sold their business and realised a liquidity event, the exit (if not already done) may be easier to organise and to make viable.
As some nations grapple with this migration, others stand to gain—but which will they be? Our next article will be dedicated to identifying the “trendiest” attracting jurisdictions for HNWIs and especially Ultra HNWIs.
This article originally appeared in Agefi Luxembourg, see link here (page 6).
1 Capgemini Research Institute, “World Report Series 2024, Wealth Management”.
2 Altrata, “World Ultra Wealth Report 2024”.
3 The New York Times, “The Greatest Wealth Transfer in history is here, with familiar (rich) winners”, 14 May 2023.
4 UBS, “Global Wealth Report 2024”.
5 Allianz Research, “Surprising relief, Allianz Global Wealth Report 2024”.
6 Courrier international, “Quels pays votent en 2024 et quand votent-ils ?”, 10 February 2024.
7 Henley & Partners, “The Henley Private Wealth Migration Report 2024”, 18 June 2024.
8 Arun Advani, David Burgherr, Mike Savage, Andy Summers, “The UK’s ‘non-doms’: Who are they, what do they do, and where do they live?”, CAGE Policy Briefing no. 36, April 2022.
9 HM Revenue & Customs, “Statistical commentary on non-domiciled taxpayers in the UK”, 9 July 2024.
10 Henley & Partners, “World’s Wealthiest Cities Report 2024”.
11 The Global Financial Centres Index 34, 28 September 2023.
12 Henley & Partners, “Henley Private Wealth Migration Report 2023”.
13 Andrew Amoils, “London’s Wealth Exodus”.
14 Oxford Economics, "Assessing the impact of proposed reforms to the non-dom regime, a report for foreign investors for Britain", September 2024.
15 A. Solimano, “Global Mobility of the Wealthy and their Assets: An Overview”, IMC-RP 2018/2.
16 UBS, “Global Family Office Report 2024”.
17 Enea Baselgia, Isabel Z. Martinez, “Mobility Responses to Special Tax Regimes for the Super-Rich: Evidence from Switzerland”, CESifo Working Paper No. 11093, April 2024.
18 Dominic Volek, “The Great Wealth Migration”, The Henley Private Wealth Migration Report 2024.
19 i.e. 74,000 out of the 68,300,000 UK population in mid-2023 (sources: HM Revenue & Customs, “Statistical commentary on non-domiciled taxpayers in the UK”, 9 July 2024; Office for National Statistics, “Population estimates for the UK, England, Wales, Scotland and Northern Ireland: mid-2023”, 8 October 2024).
20 HM Revenue & Customs, “Statistical commentary on non-domiciled taxpayers in the UK”, 9 July 2024.
21 i.e. a total revenue of income tax, capital gains tax and national insurance contributions of GBP 469,36 in 2023 (source: HM Revenue & Customs, “HMRC tax receipts and National Insurance contributions for the UK”, 21 November 2024).
22 Oxford Economics, "Assessing the impact of proposed reforms to the non-dom regime, a report for foreign investors for Britain", September 2024.
23 Financial Times, “Rachel Reeves to soften UK non-dom tax reforms”, 23 January 2025.
24 Eurostat, “Euro area government deficit at 3.6% and EU at 3.5% of GDP”, 22 October 2024.
25 Capital, “C’est quoi cette surtaxe pour les grandes entreprises qui fait bondir les grands patrons français ?”, 29 January 2025.
