[Salon] Wealthy taxpayers pay thousands to claw back EU citizenship after Brexit

An “untold increase” of high net worth British nationals are paying hundreds of thousands of pounds to become EU citizens, wealth experts have warned.

Countries including Latvia, Greece, Malta, Austria and Portugal are touting ‘golden’ visas and citizenships to an increasing number of British taxpayers looking to become domiciled abroad.

It comes as Britain is forecast to lose a net 3,200 high net worth individuals in 2023, more than Russia, amid the most onerous tax burden in post-war history, according to expat advice firm Henley & Partners.

The company, which advises clients on how to gain foreign residency and citizenship, recorded a 344pc increase in applications for its EU programmes from UK citizens between 2020 and 2021 in the wake of Brexit.

The interest dipped 22pc between 2021 and 2022, but applications have now skyrocketed again by 250pc in the second quarter of 2023 versus the first quarter – as Britain’s tax burden grows.

Stuart Wakeling, a managing partner at Henley, said: “We’ve got more British clients than ever before. [We have seen an] untold increase in demand in what we do from Brits because they are not happy about being outside the EU.”

He added: “There are big drivers for millionaires to move, tax is always going to be one of them. Whether you’re American or British.”

Last year 557,000 British passport holders emigrated, official figures show, as the Prime Minister, Rishi Sunak, is accused of launching the biggest tax raid in 44 years with one in five expected to become higher-rate income taxpayers by 2027.

At the same time, British nationals are facing more restrictions on their ability to live and work on the continent. From 2024 visitors from the UK must pay for the European Travel Information and Authorisation System, which is valid for three years and allows stays of up to 90 days within any 180-day period.

Low-tax jurisdictions like Malta, with a top rate of 35pc, offer citizenship for applicants prepared to invest €738,000 for a minimum residence period of 36 months or €888,000 for a minimum of 12 months. The Mediterranean island’s citizenship scheme has been one of the most applied to from Brits this year, according to Henley.

Real estate investments in Greece of €250,000 grant applicants residence and visa-free travel in the EU’s Schengen area and the right to apply for citizenship after six years of residence, while those who invest a minimum of €60,000 in Latvia can enjoy the same benefits, with a pathway to citizenship after 10 years of residence.

Countries famed for their high quality of life, such as Austria and Switzerland, also seek to attract wealthy foreigners by investment.

Swiss residence permits require minimum annual taxes of ₣250,000, while investment of €10 million to a business, or €3 million to a government development fund, is generally required for Austrian citizenship. There are usually further requirements beyond monetary contributions for citizenship and residency schemes.

The net outflow of high net worth citizens from the UK, who are classed as having investable assets of $1 million or more, surged to 4,200 in 2017 following the Brexit referendum.

The figure is now climbing again to 3,200, beating Russia’s 3,000, and making the UK the third biggest loser of millionaires globally after China and India, according to Henley’s data.

Prof. Trevor Williams, former chief economist at Lloyds Bank Commercial, said: “Whatever one may think about the merits of Brexit, this cohort is voting with its feet. Coupled with the policy change to remove permanent non-domiciled taxpayer status, Brexit has made the UK less hospitable and welcoming to high net worth individuals.

“It’s now harder for them to move between the UK and EU countries. And evidence shows that the UK’s share of inward investment into Europe has declined since it left the EU, with Germany and France benefiting.”

Sunita Singh-Dalal, a partner at Dubai-based law firm Hourani and Partners, said: “The recent unsettling British ‘Non-Dom debate’ triggered by unprecedented political volatility, coupled with rising debt, a dysfunctional healthcare system, high crime rates, and a general sense of lingering malaise, has clearly tarnished the lustre of London.”