Italy Is Successfully Luring Wealthy Foreigners Away From the U.K. #ItalyFinance

In the wake of the United Kingdom’s tax overhaul, Italy has come out on top.

The Mediterranean nation has seen an influx of ultra-wealthy foreigners entering its borders over the past six weeks, ever since the U.K officially ended its tax breaks for “non-doms,” a.k.a., the country’s foreign residents, last month. In particular, Milan has become a popular landing spot for these UHNW individuals in the aftermath of the levy changes, Bloomberg reported.

More from Robb Report

As Italy’s financial hub—which has become even more alluring post-Brexit—Milan is an ideal locale for the U.K.’s former non-doms who still want to have a presence in Europe. Italy’s financial benefit to these individuals mirrors what the United Kingdom had offered for over 200 years in its previous tax regime: The ultra-wealthy can pay a flat levy of $223,000 (€200,000) to sidestep Italian taxes on earnings overseas, according to Bloomberg.

Italy has its own non-dom system, too, which it unveiled back in 2017, much to the delight of financiers and other affluent individuals. This flat-tax regime doesn’t just apply to earnings as wealthy individuals will get a break on inheritance taxes for overseas assets as well, Bloomberg reported. And if a well-to-do foreigner becomes a full Italian tax resident, they can usually expect to see a levy of up to 8 percent on inheritance; the U.K.’s rate, in comparison, normally sits at 40 percent. All of this coupled with the nation’s great weather and more relaxed way of living—plus a swath of new luxury restaurants and hotels over the past few years—has made the nation even more popular for the ultra-wealthy who wish to relocate.

People such as Elio Leoni-Sceti, an Italian, certainly see value in the move. The former CEO of EMI Music and an investment-firm cofounder has made his way back to Italy, according to Bloomberg. Nassef Sawiris, the richest person in Egypt and the owner of the Aston Villa football club, is hopping on the trend, too, splitting his time between Abu Dhabi and Italy. And Bart Becht, the former chief executive of Reckitt Benckiser Group Plc, has also moved to the Med nation after living in the U.K.

The U.K.’s non-dom changes have been brewing for some time. Originally, the 2024 plans laid out by the Conservative Party (then in power in the U.K. government) called for the removal of the non-dom regime, which allowed the ultra-wealthy to avoid paying taxes on income earned abroad. Prime Minister Keir Starmer’s Labour government added a new wrinkle to the proposal by removing inheritance tax breaks on assets in overseas trusts. As a result of these tweaks, the government is expecting to collect more than $5.3 billion (£4 billion), the U.K. Treasury says.