Chiara Muston writes for City AM on unexpected trade-offs that can come with relocating to low-tax jurisdictions

Recent analysis has revealed there has been a significant increase in the number of UK directors leaving the country to take residence abroad, while maintaining at least one directorship in UK businesses. 

Between October 2024 and July 2025, 3,790 directors (40 per cent more than in the same period last year) reportedly left the UK. Although this figure is affected by a large number of individuals returning to their home country (mainly Germany and China), the analysis found that many UK nationals chose to depart too, with the UAE, Spain and the US their preferred destinations.

The main reasons cited for the surge has seemed to be the current government’s decision to abolish the non-dom tax regime, increase capital gains tax and national insurance and reduce inheritance tax relief. 

Despite this trend, Chiara Muston, Senior Associate in our Employment team, warns that "while the decision to structure business activities in tax-efficient jurisdictions to reduce tax on dividends and capital gains is a legitimate one [...] directors and businesses should be careful of the unexpected and unwelcome trade-offs that may arise in low-tax countries, especially when it comes to employment law".

Writing for City AM, Chiara explains that "senior executives who are thinking of moving abroad should not just focus on the tax advantages but look at the broader picture and think long-term before packing their suitcase and making the leap".

In the article, Chiara covers:

• Local legislation potentially including imperative or mandatory rules which could override whatever arrangements exist between the senior executive and their employer
• The fact that in some European jurisdictions, holding a directorship is considered incompatible with employment status. The knock-on effect of this could be that the director loses employment status or statutory protections
• How mandatory provisions applying in the new jurisdictions may affect the enforceability of the post-termination restrictions in the executive’s contract
• Difficulties that can arise in the event of disputes or strained employment relationships 

• The fact that in some jurisdictions, a director’s ability to pursue certain claims may be severely curtailed due to enforcement mechanisms not always being as mature or certain as they are in the UK

Read the full article in City AM here.