For many years, London and the UK have been seen as pre-eminent worldwide destinations for the international wealthy to live, buoyed by highly favourable tax and immigration regimes for new arrivals.
More recently though, political and actual and rumoured legislative changes have led clients and market commentators to question their status as an attractive place to live. Worries about the future of the UK after Brexit were followed by global lockdowns and travel restrictions.
As worldwide travel reopened, the "investor visa" route to acquiring a UK visa was closed in February 2022.
Now, as the 2025 deadline for a general election approaches, the opposition Labour party's policy statements, which, if the Labour party forms a government post-election, include an end to the "remittance basis" for non-domiciled individuals and the imposition of VAT on private school fees, have, according to many, impaired the attractiveness of the UK internationally. But is that perception really fair?
The UK, and London in particular, remain (and in our view will remain for many years to come) highly attractive international destinations for entrepreneurial and otherwise wealthy individuals and their families.
Much as favourable tax and immigration regimes have put non-UK countries on the list of potential destinations which would never previously have been considered by clients, many individuals considering moving to those other countries will be put off by the prospect of living there longer term.
By contrast, many who have spent time in London and the UK see it as a highly attractive place to live and struggle to find a global city of similar depth and variety where they feel that they and their families can enjoy life, drive forward their businesses and give the next generation an excellent education, all while benefitting from a tax regime that, even absent the special "remittance basis" regime, is likely still to compare favourably with other jurisdictions boasting similar attractions.
Taking in turn some of the key topics of discussions with families considering a move, we have set out some of the key reasons why we consider the UK remains a highly attractive destination and why it is likely to remain so:
Highly favourable tax environment
The UK has a highly attractive tax regime for new arrivals (born abroad to non-UK parents, and never having lived in the UK, who do not intend to reside in the UK permanently). At the moment, the "remittance basis" regime, available for up to 15 tax years, is one of the most attractive in the world.
It allows individuals to shelter their foreign profits from UK income tax and capital gains tax unless they "remit", or use, them in the UK. Even long-stayers in the UK who take steps before they have been resident for 15 of the previous 20 tax years can continue to benefit from some favourable treatment under the rules for so-called "protected settlements". What about talk of the abolition of this regime?
The Labour opposition (whose electoral success is by no means guaranteed) has given some indication that, if abolished, the remittance basis would be replaced with an alternative "clear, simple and modern system" for short stayers. However, there are, so far, only breadcrumbs from which to determine what that alternative might look like.
The academic research from Warwick University and London School of Economics, which Labour had considered in forming their position, observed (correctly) that the existing system could deter individuals from remitting money to the UK. Taking that criticism as a guiding principle, together with a desire for simplicity, could favour a form of flat tax regime (similar to that available in Italy or Switzerland) for the first, say, five years in the UK.
Whilst the Shadow Chancellor, Rachel Reeves, stated that she would instead look at countries such as Canada, Germany, France and Japan, she did not indicate that this was an exhaustive list and indicated that there would be consultation. A consultation on the remittance basis would not be unwelcome because, whilst conceptually attractive, the detail and complexity of the rules can, on closer inspection, be offputting.
It is possible that a new regime may actually be more attractive, even if only available for a shorter period. Further, it is reasonably likely that "protected settlements" created now, under existing (relatively generous) rules, would continue to be "protected" even after legislative change.
So, there is probably a window of time, before a post-election emergency budget, for individuals to avail themselves of this opportunity. One way or another, it does seem likely that the UK will remain a comparatively favourable fiscal environment.
Multiple immigration routes to live in the UK
There are still multiple routes to obtain visas to live in the UK. Whilst the closure of the "investor visa" route removed a flexible route to residency in the UK, it should be replaced by another business experience-focused investor route albeit with a higher investment requirement (details still awaited).
In any event, there are still ways entrepreneurial individuals and their families and family offices can relocate to the UK. The skilled worker route, which could be secured through the creation of a UK family office, or the high potential individual route, can both enable individuals to live and work in the UK.
Those who plan to spend less than six months a year in the UK and will not need to work in the UK can still make use of visitor visas. A parent of a child under 12 who will be studying at a fee-paying school may be able to obtain a visa to spend time in the UK as their carer. For those with historic family connections to the UK, there can also be routes to obtain citizenship through those means. The current immigration position does require greater thought and planning, but it would not be correct to perceive the UK as 'closed'.
Leading financial centre and global hub
There also remain the usual compelling practical factors for the UK. London remains a leading international financial and business hub in a convenient geography and timezone. There was no single EU heir to London's crown as an international finance centre post-Brexit, so a wide talent pool remains, including for family offices (which is an important factor when compared with other jurisdictions which have attracted family office creation in recent years).
The UK's reputation as one of the least complex places to do business remains justified by studies such as the TMF Global Complexity Index, where it scores 72 of 78, indicating that it is one the easiest countries to get projects done.
Additionally,the high quality of schools and colleges/universities is still a major factor in attracting families to relocate to the UK and/or to invest in UK property for those family members who do. An introduction of VAT on school fees may be unlikely to deter UHNW international parents from sending their children to prestige UK institutions.
Stability, security and investment potential
The UK remains stable by international standards and the rule of law prevails, so having a UK bolthole continues to be a prudent strategy for clients from less stable regimes. The impact of high interest rates and a more general cooling of the London prime market have created favourable conditions for cash buyers of prime residential property.
Even if the Labour opposition, as proposed, increases SDLT for non-resident buyers, the current top rate of 17 percent is currently some way below, say, Singapore, which has a top rate of 60 percent. There are also commercial opportunities in relation to non-residential property and the Labour opposition has not, so far, given any clear indication that it would remove the ability for overseas buyers to shelter such assets from UK inheritance tax.
London office space enjoys better occupancy rates than certain other major cities and there has been growing interest in rural land for sustainability projects, to give a couple of examples.
Cries of "Rain within doors, and none abroad!" might in one sense be true, but the UK has never promised clear skies all year round. London and the UK remain highly attractive places to be.