UK’s rich keeping family offices in London despite tax worry
[LONDON] Concerns around wealth taxes are prompting worries that the UK’s ultra rich are moving abroad, but the business of managing their fortunes is still largely staying in London, new data shows.
Out of the UK’s 259 single-family offices, which manage total funds of about US$344 billion for the rich, 52 are owned by non-domiciled individuals, according to figures from analytics firm With Intelligence. While 19 per cent of these non-dom owners are leaving the country, With Intelligence found that just one family office has relocated with its principal.
“Although a significant proportion of this money is invested in international public and private markets, the management of this sizeable sum of private capital in London makes a meaningful contribution to the city’s status as the premier global financial centre after New York,” said Alastair Graham, director of family offices at With Intelligence.
The decision by most family offices to stay put so far may provide some relief to Chancellor of the Exchequer Rachel Reeves, whose flagship “tax the rich” policy has drawn criticism amid several high-profile departures of wealthy business people from the UK. While there is concern the exits would divert investment and spending away from the UK, family offices choosing to remain suggests the hit to London’s financial sector would be less severe.
Shortly after her Labour party swept to power in July 2024, Reeves announced she would abolish a two-century-old tax break for well-heeled foreigners residing in the UK, who are also known as non-doms. That prompted a stream of millionaires and billionaires to map out an escape route from the country.
A Bloomberg News analysis in June of five million company filings showed a spike in departing business leaders, with more than 4,400 disclosing an overseas move in the preceding year.
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Reports have emerged recently that Reeves is considering a wealth tax in her autumn Budget. While this is thought to be unlikely in some government circles, Reeves may look at raising taxes on wealth more broadly, such as capital gains and corporation tax.
With Intelligence tracks 3,500 family offices worldwide. Of the 259 in the UK, the families may not be resident in the country but choose the City of London for its strong reputation in investment, fiduciary, tax, and legal advisory services.
The data on non-doms was gathered by cross-referencing With Intelligence’s own family-office database against Companies House filings, to identify the residence of the “person with significant control”.
People with London-based family offices who have left or planning to exit the UK include Thomas and Morten Hoegh, Lakshmi Mittal, Richard and Ian Livingstone, Elio Leoni Sceti, John Fredriksen and Guillaume Pousaz.
The only non-dom who has left the UK and disclosed that he is moving his family office is Nassef Sawiris, the son of Onsi Sawiris who founded engineering conglomerate Orascom Group. He departed for Italy earlier this year, blaming “incompetence by the most left-leaning Conservative party in history” preceding Labour’s time in office.
Sawiris’ family office NNS Advisers had already announced its relocation to Abu Dhabi at the end of 2023, before Labour came to power. In a statement, he said the importance of the United Arab Emirates to the worldwide financial ecosystem made NNS believe that redomiciling there would “contribute to the further development and growth of its portfolio and core activities”.
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