Wealth Taxes, Non-Doms and Capital Flight: Foreign Investors for Britain CEO Speaks to Knight Frank

Posted by Knight Frank Newcastle on 14th August 2025 -

Wealthy overseas investors will be watching political events unfold over the next few months with particular scrutiny.

The key focus is whether the government will tweak rules that have replaced the centuries-old non dom regime. Specifically, they will want to see a softer stance on applying UK inheritance tax (IHT) to assets held overseas.

With party conference season kicking off next month, investors will be hoping for some good news.

Under the previous regime, non-doms could live in this country without paying UK tax on their overseas wealth. As well as the IHT proposals, the new rules impose a residence-based framework with a four-year time limit.

If they remain unchanged, expect more wealthy individuals to depart and the government’s financial headroom to get tighter as tax revenues drop further. That’s the clear message from Leslie McLeod-Miller, chief executive of Foreign Investors for Britain (FIFB), talking on the latest Intelligence Talks podcast.

“It's absolutely true that those with the broadest shoulders should bear the greatest burden,” he said. “But those with the broadest shoulders normally also have the longest legs, and they are highly mobile.”

A dangerous thing

Separate speculation around a wealth tax is also spooking investors, he said. “We are urging the Chancellor to confirm there will not be a wealth tax. So far, she has refrained from doing so but that is a dangerous thing. Historically, it’s clear that wealth taxes simply don't work.”

Leslie covers a wide range of topics during the discussion, including the obstacles Foreign Investors for Britain has faced and why he is still hopeful politicians will see sense.

The reason for his optimism is that there are common interests on both sides of the debate. Overseas investors are prepared to pay more tax, and the government is presumably happy to collect more given its financial predicament.

Any tweak to the IHT rules just needs to be sold properly, he says.

“The narrative has to be that the government needs to find more money order to maintain its promises, to help the ordinary working person, to provide things like school meals, and dentistry services,” he said.

Flat Tax Merits

Part of the lobbying efforts include trying to convince the government about the merits of an Italian-style flat tax. Under a so-called tiered tax regime, investors would pay an annual sum to stay in the UK. The concept could eventually take the form of an investor visa.

“If you look internationally, what are governments doing? They know they need to drive growth in their countries and so they are saying ‘come to me, come to me,” which is what Trump did with his golden visa. Overall, people would be prepared to pay a premium for staying in the UK.”

The Reform Party have already touted the idea of a Britannia Card, with a one-off payment of £250,000 but that sum is at the low-end of what could eventually be charged.

With party conference season beginning next month, Leslie expects the issue to remain in the news as FIFB steps up its campaign of Parliamentary events.

“If more people leave, the only thing left for the government to tax will be ordinary working people,” he said.

The Office for Budget Responsibility has already sent a warning, in its own low-key way.

“Migration is assumed to be a significant behavioural response for non-domiciled taxpayers,” it said in a report last month that set out its assumptions for the UK economy. It was a marked shift in tone from the even more circumspect language used in previous reports.

Over the next few months, the government has the power to make sure its language doesn’t get more dramatic.