Wealthy individuals are leaving the UK and relocating to Italy since the Labour Party announced plans to abolish the non-dom regime, says Nicola Saccardo, partner and Italian tax expert at international law firm Charles Russell Speechlys.
He said: "We’ve seen an uptick in relocations to Italy among wealthy individuals. There has been significant interest in the Italian lump sum tax regime among private equity partners, particularly due to Italy’s favourable treatment of carry interest in contrast to the UK.
"It’s this favourable and simple tax regime coupled with an excellent lifestyle that makes Italy an attractive destination, and individuals relocating primarily target areas like Milan, Rome, Florence, Tuscany and the Como Lake. Milan is especially preferable among private equity professionals."
He added: "We're also observing a significant migration to Italy from other EU countries and Latin America. The upcoming French elections could trigger similar migration patterns.
"The government needs to strike the right balance to attract the wealthy to Britain but ensure that these proposals don’t accelerate peoples plans for relocation."
Taxation and citizenship adviser David Lesperance, managing director of Lesperance Associates also highlighted the draw of Italy in a LinkedIn comment on 24 July: "Italy is one of the most popular destinations for UHNW Non-Doms who are leaving the UK ahead of Rt Hon Rachel Reeves upcoming November budget announcements on the Remittance Basis and Excluded Property Trust abolition/reform.
"Along with a ceiling on annual tax liability, Italy has two other major benefits:
a) Zero compliance cost or effort;
b) Tax Treaty which allows for more "midnights"in the UK than is allowed under the Statutory Residence Test.
"So all the benefits of living in Italy while enjoying the UK without UK tax residency!"
