Thor Björgólfsson, Iceland's first billionaire, has relocated his investment firm Novator from London to Zurich and changed his tax residency to Italy, citing changes to the United Kingdom's tax system. Björgólfsson stated that the move is part of a larger trend, describing it as an "exodus" of wealthy individuals from Britain.
His relocation coincides with the United Kingdom's abolition of the non-domicile tax status, a regime that allowed some high-net-worth individuals to avoid paying full UK tax on their overseas earnings. The change, implemented in April of the previous year by Chancellor Rachel Reeves, replaced the non-dom rules with the Foreign Income and Gains Regime. Under the new system, wealthy individuals who have not been UK residents for the past decade can be exempt from paying tax on their foreign earnings for four years.
Björgólfsson told Bloomberg that the speed at which wealthy businessmen are leaving Britain is significant and that the "collateral damage is exploding elsewhere." He noted that the situation has developed rapidly and expressed concern that the government may have made a mistake with the policy change.
Other prominent figures have also left Britain for Italy. Nassef Sawiris, co-owner of Aston Villa FC, has also shifted his tax residency to Italy. Brothers Ian and Richard Livingstone, who manage a substantial property empire, have moved to Monaco.
Björgólfsson was previously a major shareholder in Landsbanki, one of Iceland's largest banks, which collapsed during the 2008 financial crisis. He suggested that the UK government should consider a flat-rate tax system, similar to Italy's, to cap the tax liability for entrepreneurs and business leaders.
Some billionaires have openly discussed their reasons for leaving the UK. Sawiris cited concerns over Labour's inheritance tax policies and a perceived "decade of incompetence" under previous Conservative governments. Norwegian billionaire John Fredriksen, previously based in London, moved his shipping firm to the United Arab Emirates last year, stating that Britain had become a less favorable place to conduct business.
The non-domicile tax status allowed UK residents whose permanent home was abroad to be taxed only on income generated within the UK. The Labour government abolished this status following criticism that wealthy residents could benefit from living in the UK without contributing as much in taxes. The Treasury estimated that scrapping the regime would generate approximately £2.7 billion for the government by 2028-29, which could be invested in public services like the NHS.
A Treasury spokesperson commented that individuals making their home in Britain should pay their taxes there, adding that the UK remains an attractive place to live and invest with competitive capital gains tax rates and a simpler, fairer tax system.