Following October’s unforgettable (for all the wrong reasons) autumn budget announcement, it is quite easy to see why a projected 9,500 millionaires are due to leave the UK this year alone, with around 500,000 set to depart by 2028(1).
Even prior to Rachael Reeves announcing the abolition of the non-domiciled tax regime, which is due to end in April 2025 and be replaced with a new residence-based regime, many high-net-worth individuals were looking to take themselves, their business and their wealth, abroad to more tax efficient shores.
Under the new regime, there will be ‘100% relief on foreign income and gains for new arrivals to the UK in their first 4 years of tax residence, provided they have not been a UK tax resident in any of the 10 consecutive years prior to their arrival (4-year foreign income and gains regime)’(2). For current residents the change in legislation means non-UK assets will be included in inheritance tax and capital gains tax, as well as foreign income being taxed from the 4th year onwards.
For those looking to move abroad before the new regime comes into play, the biggest question will be ‘where is the best jurisdiction to move to’. This is entirely dependent on the individual’s situation, however we can advise on the most popular destinations, as well as the pros of each. Please note, the below jurisdictions are in alphabetical order only.
Belize
- Belize offers an array of tax advantages, including no capital gains tax, no inheritance tax and no tax on foreign-sourced income. It is also a popular jurisdiction for offshore banking and International Business Companies (IBCs), which offers tax-neutrality for non-Belizean activities. Belize does not withhold taxation on interests, rent, royalties, compensation, or anything else that might be an expense of a Belize LLC.
Learn more here – https://www.turnerlittle.com/company-formations/offshore-company-formations/belize-offshore-company-formation/.
British Virgin Islands
- The British Virgin Islands (BVI) also offers some great advantages when it comes to tax, with no personal income, capital gains, inheritance or wealth tax. The BVI is also a global leader in offshore company formation, offering high levels of privacy, asset protection and tax neutrality. As an added bonus, there is also strong asset protection laws and financial privacy for residents. The jurisdiction offers a professional legal and regulatory framework, which aligns with global expectations for transparency.
Learn more here – https://www.turnerlittle.com/company-formations/offshore-company-formations/bvi-offshore-company-formation/.
Cayman Islands
- For those considering the Cayman Islands as a potential jurisdiction, they will be pleased to know there is no personal income, capital gains, inheritance or corporate tax – a highly attractive pull for those with substantial global income. The Cayman Islands is also considered an international financial hub, with a strong banking sector and advanced infrastructure for offshore banking and trusts. There is also long-term residency available through investment in real estate. A benefit for many, the Cayman Island’s legal system is based on English common law, providing a familiar and reliable environment for business owners.
Learn more here – https://www.turnerlittle.com/company-formations/offshore-company-formations/cayman-islands-company-formation/.
United Arab Emirates
- The United Arab Emirates (UAE) has no personal income or capital gains tax, and offers incredibly favourable conditions for high-net-worth individuals. The jurisdiction also offers various residency programmes, including those for investors, entrepreneurs and skilled professionals. On top of the above, the UAE has a very politically stable and fast growing economy, and there are numerous ‘free zones’ that allow 100% foreign ownership and tax exemptions, which are an ideal pull for business owners and entrepreneurs.
Learn more here – https://www.turnerlittle.com/company-formations/offshore-company-formations/rak-offshore-company-formation/.
Gibraltar
- Gibraltar has no capital gains tax, inheritance tax or VAT, and a flat income tax rate for high-net-worth individuals, under the ‘Category 2’ residency scheme. It also offers easy access for travel to both the UK and the EU, which is incredibly beneficial for those with business ties to the areas. Gibraltar is also known for its financial services sector, offering strong regulatory oversight while remaining a favourable environment for banking and insurance. The regulatory environment is aligned with international standards and can provide much needed flexibility for structuring trusts and businesses.
Learn more here – https://www.turnerlittle.com/company-formations/offshore-company-formations/gibraltar-offshore-company-formation/.
Hong Kong
- Hong Kong has low personal and corporate tax rates, and only income sourced from Hong Kong itself is taxed, with no capital gains, inheritance or dividend tax. The jurisdiction is also known for its reliable banking system, providing a sophisticated and safe environment for wealth management. There is no specific ‘offshore’ company legislation in Hong Kong, and all companies are incorporated under the same regulations regardless of whether or not they choose to carry out business in Hong Kong. The main attraction here is that companies who do not derive any income from sources in Hong Kong do not pay tax.
Learn more here – https://www.turnerlittle.com/company-formations/offshore-company-formations/hong-kong-offshore-company-formation/.
Jersey
- Jersey has an attractive tax regime, with no capital gains tax, inheritance tax or corporate tax on foreign-sourced income, along with a 20% income tax rate that can be capped for high-net-worth individuals. The only time corporate tax is added is if a company falls into rental and property development, utilities or financial services. It is also known as a leading offshore financial centre for trusts, private banking, fund management and more. Finally, Jersey offers a stable and regulated financial environment. The jurisdictions company law is largely based on English common law with a few French modifications.
Learn more here – https://www.turnerlittle.com/company-formations/offshore-company-formations/jersey-offshore-company-formation/.
Malta
- While Malta has a 35% income tax rate, non-residents and expats under specific programmes can benefit from a remittance basis of taxation, where only income remitted to Malta is taxed. A Maltese company incorporation offers entrepreneurs access to EU tax treaties as well as providing companies with a European domicile which is favourable to clients worldwide. Malta also has over 70 double taxation agreements with other countries to ensure a company does not pay taxes twice for the same income. The low tax rates, stable political system and professional business policy make Malta an attractive offshore company choice.
Learn more here – https://www.turnerlittle.com/company-formations/offshore-company-formations/malta-offshore-company-formation/.
Nevis
- Nevis offers a very attractive tax environment, with no personal income, capital gains, inheritance or corporate tax on foreign-sourced income. It is also known for its robust asset protection laws, which are designed to help shield assets. In addition to this, Nevis also provides a high level of financial privacy for offshore entities and bank accounts.
Learn more here – https://www.turnerlittle.com/company-formations/offshore-company-formations/nevis-offshore-company-formation.
Seychelles
- Seychelles offers no capital gains tax, inheritance tax or wealth tax, making it very attractive for non-domiciled individuals seeking tax efficiency. The jurisdiction also has a well-established offshore sector, with trusts benefitting from tax neutrality for non-Seychelles activities. Strong privacy protections for financial entities is another positive for this location, with laws designed to protect client information and corporate confidentiality.
Learn more here – https://www.turnerlittle.com/company-formations/offshore-company-formations/seychelles-offshore-company-formation/.
Each jurisdiction offers unique benefits in terms of tax efficiency and business opportunities, making each an attractive alternative to the UK for non-domiciled residents. However, each person’s situation is unique, and choosing the best jurisdiction will depend on the individuals financial situation, lifestyle preferences and legal needs.
For expert advice on relocation and, if needed, offshore company formation, please get in touch with specialists at Turner Little.
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