A recent survey suggests that more than half of the UK's millionaires are considering leaving the country in search of more benign meteorological and tax climes.
Taxation, perceived better living standards outside the UK and the weather are the main reasons why UK millionaires would consider a move abroad, according to the survey by investment firm Skandia.
The research also found that over 50% of UK millionaires are or could consider leaving the country to find a higher standard of living. Only 44% are certain of remaining in the UK, while around 8% are already planning to leave.
Despite this, under 2% of those considering a move abroad are thinking of a move to a tax haven such as Switzerland or the Cayman Islands to reduce the amount of tax they pay. Instead, for those millionaires considering a move abroad, four countries alone account for almost 50% of preferred destinations - France, the US, Spain and Australia.
“Our survey seems to indicate that the UK’s wealthiest really are saving for a rainy day and will seriously consider moving to sunnier climes if storm clouds gather in either economic or meteorological terms,” said Jo Rimmer of Skandia.
Seamus Murphy, senior tax manager of taxback.com, notes that the results of Skandia's survey reinforce the findings of other studies, including one compiled for the UK tax agency, HMRC, which indicated that one-in-four large businesses are considering leaving the UK. "And realistically, it is probably no surprise that those with means are looking for the exit," Murphy said.
"The UK now has one of, if not the, longest and most complex tax code in the world. Combined with the introduction of the 50% higher tax rate, the restriction on personal allowances and the restriction on pension relief maybe the UK's millionaires feel that their contribution is being taken for granted," Murphy added. "As the report highlights, the majority of those interviewed are self-made; their exit from the UK would be a considerable loss of entrepreneurial talent upon which the UK's recovery must surely be based. The Coalition needs to consider giving a firm date for the reduction in the 50% rate and continue their efforts to simplify the tax code as swiftly as possible.”
The results from the first round of the Skandia Millionaire Monitor shows that the wealthiest people in the UK are making their considerable fortunes through a mix of entrepreneurship and hard work. The survey of more than 500 millionaires found that nearly 70% of the high net worth individuals made their fortunes from employment income, investments or as the result of selling their business venture.
The research found that the influence of old money is less in evidence, with only 14% of those surveyed saying their wealth comes solely from inheritance income. Trusting luck to make a fortune also appears to be a risky strategy, with just 4% of the sample saying their wealth has come from winning the lottery or by gambling. However, almost 15% of wealthy younger people acquired their fortune through either winning it or through marriage – a three times higher incidence than among those aged over 50 years of age.
“The results [of the survey] show that UK’s wealthiest are controlling their future financial security by working hard and investing wisely, not crossing their fingers and hoping for the best," said Rimmer.
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