The UK abolished non-dom status in April 2025. 16,500 millionaires are leaving Britain in 2025 alone. Here's why Italy is their #1 European destination and how the €300K flat tax compares.
The UK is experiencing the largest exodus of wealth in its modern history. According to the Henley Private Wealth Migration Report 2025, Britain will lose a net 16,500 millionaires this year — more than double China's outflow and the highest loss ever recorded by any country. The trigger: the abolition of the non-domiciled resident (non-dom) tax status, effective April 6, 2025, combined with sharp increases in capital gains and inheritance tax announced in the October 2024 Budget.
Italy is the single largest beneficiary of this shift within Europe, attracting a projected net inflow of 3,600 millionaires in 2025 — behind only the UAE (9,800) and the US (7,500) globally. Milan has emerged as the primary destination for UK HNWI seeking a combination of European lifestyle, tax efficiency, and cultural depth that no other jurisdiction can match.
| Factor | Italy | Switzerland | Portugal | UAE |
|---|---|---|---|---|
| Flat tax | €300K/year | CHF 400K-1M+ (varies) | 20% (limited scope) | 0% |
| Duration | 15 years | Ongoing | 10 years | Ongoing |
| Can you work? | Yes | No (lump-sum) | Yes | Yes |
| Inheritance tax on foreign assets | €0 | Varies by canton | 0% (direct line) | 0% |
| EU passport path | 10 years | 12+ years | 5 years | Never |
| Healthcare (WHO rank) | #2 | #20 | #12 | #27 |
| Flight to London | 2 hours | 1.5 hours | 2.5 hours | 7 hours |
| Cultural depth | 2,000+ years | Medieval-modern | 500+ years | 50 years |
| Lifestyle city | Milan (global) | Zurich/Geneva | Lisbon | Dubai |
Until April 2025, UK non-dom status allowed foreign nationals living in Britain to pay UK tax only on income remitted to the UK, not on worldwide income. An estimated 74,000 individuals claimed non-dom status, contributing approximately £8.9 billion in tax revenue. The new regime replaces this with a 4-year Foreign Income and Gains (FIG) exemption for new arrivals, followed by full worldwide taxation — fundamentally changing the UK's appeal for long-term HNWI residents.
The inheritance tax changes are equally significant. From April 2025, non-UK assets held in excluded property trusts — a cornerstone of HNWI estate planning in the UK — are brought into the IHT net after 10 years of UK residence. For a family with a £50M estate, this represents a potential £20M liability that did not exist before.
Italy's regime under Article 24-bis TUIR offers what the UK non-dom status used to provide — and more. For a fixed annual payment of €300,000 (€50,000 per additional family member), all foreign-sourced income is covered regardless of amount. There is no remittance basis, no 4-year cliff, and no retroactive clawback.
Grandfathering: If you relocated to Italy and opted into the flat tax before the 2026 Budget Law, you keep the previous rate of €200,000/year for the full 15-year duration. This grandfathering has been applied consistently with every increase, providing legal certainty.
The inheritance tax advantage is the decisive factor for many UK families. Under the flat tax regime, foreign assets are completely exempt from Italian inheritance tax. A £50M foreign estate passes to heirs with zero Italian IHT. Compare this to the UK's 40% rate above the nil-rate band, and the financial logic becomes overwhelming.
Leaving the UK cleanly requires careful planning. HMRC applies the Statutory Residence Test (SRT) to determine your departure date. You must satisfy the 'overseas' limb of the SRT, which requires fewer than 16 UK ties/days (if you have 4+ UK ties) or fewer than 46 days (if you have fewer than 4 ties). Common ties include UK property, spouse, minor children, and substantive UK work.
Yes, but the property counts as a UK tie under the SRT. You must manage your UK day count carefully. Italian-sourced rental income from a UK property is foreign-sourced (from Italy's perspective) and covered by the flat tax.
Your children can attend UK universities regardless of where you live. Under the flat tax, UK university fees paid from foreign income are covered. Many Milan international schools (ASM, ISM, St. Louis) have strong Oxbridge and Russell Group placement records.
Different, not lesser. Milan offers Michelin-starred dining at a fraction of London prices, La Scala, Lake Como 45 minutes away, skiing in 90 minutes, and a fashion capital that just overtook Bond Street (Montenapoleone is now the world's most expensive shopping street). What Milan lacks in London's financial market depth, it compensates with quality of life, healthcare (#2 vs #18 WHO), and proximity to the rest of Europe.
Italy attracted a net inflow of 3,600 millionaires in 2025 according to Henley & Partners, with a significant proportion coming from the UK. The Italian flat tax regime has been used by approximately 3,000-4,000 individuals cumulatively since 2017, with applications accelerating sharply since the UK non-dom abolition announcement.
Disclaimer: This guide provides general information as of April 2026. Tax laws change frequently. Always consult qualified professionals in both the UK and Italy before making relocation decisions. The Italian Gateway coordinates these professionals on your behalf.