Rich folks fleeing London as new taxes take bite out of fortune

LONDON: Wealthy Londoners are leaving the city as new taxes make it expensive to inherit and invest, and as Brexit prompts rich Europeans living in the United Kingdom capital to return home.

This put the British financial hub in the same category as Lagos and Istanbul, which were also seeing net outflows of rich people, according to the Global Wealth Migration Review published this month.

About 5,000 high net-worth individuals (HNWIs) left the UK last year and only about 1,000 arrived, the report showed.

“Over the past 30 years, the UK has been one of the biggest recipients of migrating HNWIs,” said the report. “However, this trend changed in 2017 when the country experienced its first major HNWI net outflow.”

Losing wealthy individuals is normally a sign of trouble in the political economy of a country. Rich people are often the first people to leave, because they can — unlike the middle class or the poor.

Cities that saw large inflows of HNWIs include Auckland, Dubai, Montreal, New York, Tel Aviv and Toronto, the report showed.

New World Wealth says it focuses only on HNWIs who have truly moved — that is, those who stay in their new country for more than half the year.

China and India continued to dominate countries that the rich were moving out of, but once the standard of living improved, several wealthy people would probably return, according to the report.

Mumbai — India’s financial hub — is expected to be the fastestgrowing city in terms of increase in wealth over the next decade.

Wealth in the entire country was predicted to triple in the period to about US$25 trillion (RM98.72 trillion), followed by China’s 180 per cent increase to US$69 trillion, according to the report.

The United States will expand 20 per cent but still tops the holdings list with US$75 trillion of wealth.

Total private wealth held worldwide amounts to about US$215 trillion, according to the report. While the average person has net assets of US$28,400, there are some 15.2 million HNWIs in the world, defined as those with net assets of US$1 million or more.

Russia is the most “unequal” country, where 24 per cent of total wealth is held by billionaires. Japan is the most equal, with only three per cent controlled by billionaires.