When fiscal zeal turns into economic self-harm

In 2025, Britain lost more millionaires than any other major economy except China.

- SHISHIR PRIYADARSHI

This did not follow war, sanctions, or financial collapse—the usual triggers of elite capital flight. It occurred in a country with strong institutions, deep capital markets and global credibility. That is precisely why it warrants attention. When a growing number of a nation's most mobile and tax-productive residents conclude that leaving is the rational choice, the issue is not personal morality but policy design.The UK's unfolding millionaire outflow is not a referendum on greed, nor a rejection of social responsibility. It is better read as an early warning about how fiscal reform, when driven as much by political signalling as by economic calibration, can generate outcomes at odds with its stated objectives.

THE FISCAL LOGIC BEHIND BRITAIN'S TURN

Any serious assessment must begin by acknowledging why Britain changed course. Public finances remain under sustained pressure from pandemic aftershocks, demographic ageing, rising healthcare costs and expanding defence commitments. At the same time, public tolerance for perceived tax inequities has thinned. The non-dom regime, increasingly seen as opaque and unfair, had become politically indefensible. Its dismantling was meant to simplify the system, broaden the tax base and restore faith in the social contract.

Similarly, higher effective taxation of capital gains and investment income reflected a widely held belief that labour and capital should not be governed by radically different tax philosophies. These choices were not reckless. They were rooted in democratic legitimacy and fiscal necessity—realities every advanced economy is grappling with. But intentions, however sound, do not immunise policies from unintended consequences.

PERCEPTION, PREDICTABILITY AND THE MOBILITY OF WEALTH