Singapore on radar for 74,000 ultra-rich UK foreign residents hit by tax change

WEALTH managers are seeing increasing interest from ultra-rich foreigners looking to relocate to Singapore from the UK, bringing with them a fresh influx of wealth, market watchers told The Business Times.

This comes as the UK is set to abolish the non-domiciled – or “non-dom” – tax status of some 74,000 ultra-wealthy foreign residents, on top of other potential tax changes under its new Labour government. 

According to David Lesperance, managing partner of global international tax and immigration adviser Lesperance & Associates, many of these ultra-high-net-worth investors have set up “fire-escape plans” to leave the UK.  

His company has prepared “backup plans” for some 30 non-dom centimillionaire families – that is, those with liquid investable wealth of US$100 million or more – to protect their assets amid current uncertainties.

These plans could include the migration of private wealth, investing in real estate, educational consulting, tax planning, alternative citizenships and business locations. 

Under the current regime, non-dom foreign residents are allowed to retain tax-free earnings, income and capital gains outside the UK.

This group contributed £6.2 billion (S$10.6 billion) in direct tax revenue last year, averaging at £84,000 per person, a report by think tank Adam Smith Institute found. 

Another report, by Oxford Economics and which surveyed 73 non-doms and 42 tax advisers representing 952 non-dom clients, discovered that 63 per cent of non-doms are planning to leave, or are actively considering leaving, the UK within the next two years. This is in light of potential tax reforms.

Their departure is expected to cost the UK government nearly £1 billion in tax revenue in 2029 to 2030. 

Of the 30 families advised by Lesperance’s company, around 10 are “seriously considering” Singapore for their next move, he said. 

Lee Woon Shiu, DBS Bank’s managing director and group head of wealth planning, family office and insurance, similarly observed a significant spike in interest in Singapore from the UK’s ultra-wealthy foreign residents.  

Inquiries from those who are likely to emigrate or are exiting the UK have grown by strong double-digits since late 2023, when it became “quite evident that the (non-dom) rules could be abolished”, he said. 

Lee noted that the number of inquiries rose even further this year – with more families making active plans to prepare for the “imminent changes” in the tax rules – when the Conservative Party lost the elections and “it became clear that the Labour Party had inclinations to commit to certain policies”. 

Although the final ruling and tax changes have not yet been announced, and will only be revealed during the UK’s Budget later this week, “some people are preparing on the assumption that these changes will be unfavourable”, he added. 

Supriya Dikshit, managing partner at executive search firm DHR Global, said she, too, has seen “growing interest” from top executives in Europe and the UK who want to explore opportunities in Singapore. However, she could not share specific figures.

The majority of non-doms looking to relocate to Singapore are Chinese and Indian nationals, observers told BT. A third of “high-end” non-doms that Lesperance advises are Indian nationals.

This group, together with other ultra-wealthy people with “an orientation to Asia”, such as those from Hong Kong, Taiwan and mainland China, prefer moving to Singapore and setting up family offices here since the environment may seem more “familiar” to them, said Lesperance.  

DHR Global’s Dikshit noted that cultural affiliation plays an important role in relocation decisions. 

The tidal movement of wealth will bring more business to Singapore’s wealth management and financial services sectors especially, and will positively contribute to the Republic’s economy, said Jeffrey Yap, HSBC Global Private Banking’s head of investments and wealth solutions for South-east Asia.  

The influx of wealthy investors could also result in an injection of demand for Singapore’s luxury properties, particularly in prime areas such as Orchard Road, Nassim and Sentosa, said Himmat Singh, joint managing director at Christie’s International Real Estate Singapore. 

“This could further strengthen Singapore’s already resilient luxury real estate market, driving up property values, especially for sought-after assets like Good Class Bungalows and high-end condominiums.” 

But Lesperance believes that the average Joe has little to worry about. “(Any impact) will probably be felt by the top one-percenters, by the crazy-rich Asians.” 

Yap of HSBC highlighted that “Singapore’s strong housing market and regulatory environment are designed to manage such fluctuations”. Foreigners now incur an Additional Buyer’s Stamp Duty of 60 per cent on any residential property purchase, after the rate was doubled last year as part of market cooling measures.  

Seeking greener pastures

Eric Robertsen, Standard Chartered’s (StanChart) global head of research, said the impending tax changes are part of a broader shift of tightening fiscal policy in Europe and the UK. “There will be some countries – the UK is an example – that have no fiscal room to ease. They’re actually tightening, and that will include raising taxes and a change in the tax regime.” 

Economies which are moving in the opposite direction, by offering sweeter tax incentives, will naturally be more attractive, he said. 

Singapore ticks a lot of boxes for tycoons, with its low tax rates, business-friendly practices and political stability. 

Deloitte Singapore global employer services partner Jod Gill said that the consultancy has so far not seen an identifiable increase in non-doms physically relocating to Singapore, but movement from the UK has been relatively consistent post-pandemic. 

Apart from stability and access to South-east Asian markets, “from a personal perspective, individuals are attracted by Singapore’s safety and high performance in the health and education sectors”, Gill added. 

Other private banks that BT spoke to noticed few wealth movements at the moment, since the tax changes have yet to be confirmed. But Singapore is definitely on the cards for those whose income and assets are vulnerable to these changes, and who are looking to exit the UK, they said. 

Beyond the city-state

Private bankers listed Dubai, Italy and Switzerland as other cities the ultra-wealthy are eyeing, for their more attractive tax rates. In Italy, for instance, a flat tax of 200,000 euros (S$285,000) per year is applied on foreign-sourced income for new residents. 

Dubai stands out as the “shiny new kid on the block”, said StanChart’s Robertsen. This goes beyond tax incentives, he added.

With greater trade flows through the Middle East, Dubai is becoming increasingly attractive, and as financial and trade centres move away from London, Frankfurt and Paris to Abu Dhabi, Dubai, Singapore and Kuala Lumpur.

DBS’ Lee said around 40 per cent of clients he has spoken to are interested in relocating to Dubai from the UK, versus the 30 per cent who are considering Singapore. 

Fewer clients are looking to move to Hong Kong, he noted. 

“Geopolitical tensions can cause a number of these people and businesses some anxiety,” said Joel Seow, investment funds partner at global law firm Linklaters. “They don’t want to be caught in the middle of it.” 

Yap of HSBC noted that Australia is also an option for the ultra-wealthy, thanks to its favourable living environment, while Malaysia may attract some because of its competitive costs. 

Corporates will gravitate to places where it makes the most sense for them to do business, said Linklaters’ Seow. An Asia-focused business would want to be in Singapore to be closer to the region, to speak to founders and visit factories.

Others are simply looking to live somewhere they can reproduce their UK lifestyles at a lower cost, said Lesperance. Some ultra-rich clients are considering living in Dubai, he said, while storing their assets and running family offices in Singapore.