An EU city once famous for fashion is making a name for itself as a haven for Brits looking to escape the impact of Rachel Reeves’s Chancellorship. A conscious effort by the Italian government to capitalise on a rise in wealthy UK residents looking for sanctuary outside of the British Isles, is seeing Milan establish itself as a haven for fleeing Brits.
The plan, known in private wealth circles as “svuota Londra” or “empty London” has seen a flurry of arrivals in the Italian city as they seek relief from Labour’s decision to scrap the preferential tax regime for non-domiciled taxpayers. Milan is Italy’s commercial capital but has long been considered a second-rate financial hub. Now, though, political decisions in Westminster and beyond have contributed to a shift in that label. Marc Acheson, a global wealth specialist at Utmost Wealth Solutions in London said: “Italy is proving extremely popular, it’s never tax alone that drives these changes but also whether the spouse and children are happy too.”
Those settling in Milan are able to pay a flat rate tax of €200,000 (£168,000) to avoid additional taxation, in a scheme similar to that offered by the UK for over a century.
The favourable tax system combined with the sun and simplicity of Italian life is making the country an attractive proposition for Brits.
According to official records, several high-profile, wealthy individuals have left the UK for Italian shores in the last year.
Elio Leoni-Sceti, 59, former chief executive officer of EMI Music returned to his native country, as did Bart Becht, 68, former CEO of Reckitt Benckiser Group Plc, filings report.
Gary Landesberg who previously owned a high end Art Club in Mayfair recently opened a similar establishment in Milan and he believes that London could seen feel the pain caused as a result of the exodus.
He told Bloomberg: “It’s this really vibrant city and you’re just two hours from everywhere.
“You can be at the beach in two hours or skiing in St. Moritz. I think London as a whole will suffer.”
It is not only a preferential non-dom status attracting Brits to the country, with favourable inheritance tax laws and low flat tax rates adding to the appeal.
Even a foreigner who becomes an Italian resident is still only liable to pay an 8% inheritance levy as opposed to the UK’s 40%.
There are currently 75,000 non-doms who contribute more than £8 billion into the UK treasury each year, according to official data.
Michael Anderson, a partner at law firm Joseph Hage Aaronson and Bremen (JHAB), told City AM: “I act for some clients that are not non-doms and are leaving the UK.”
He added that the sentiment is far from isolated and hinted that a wider exodus may already be under way. He said: “I would be very surprised if many high-earning bankers had not considered leaving the UK, even for a year or two, to save on tax.”
The warnings come amid projections that the Government’s policy shift on non-doms could lead to a loss of up to £12.2 billion in Treasury revenue by 2030, placing as many as 40,000 jobs at risk.
