Leslie Macleod-Miller built a career working partly behind the scenes at companies controlled by some of the world’s most prominent billionaires. Lately, he has a new gig with the ultra-wealthy, and it’s very public.
The 62-year-old veteran lawyer has become the face of a fight waged by Britain’s wealthy against a flagship tax policy for Prime Minister Keir Starmer’s Labour Party following its landslide election victory in July.
Last week, Macleod-Miller met officials in Westminster to discuss why Britain’s planned reforms of preferential tax treatment for well-heeled foreign residents — known as non-doms — will hurt its economy. At the meeting, he showcased research commissioned by his new lobby group that contradicted forecasts by the nation’s budget watchdog.
With Chancellor Rachel Reeves set to present the UK’s next budget Oct. 30, Macleod-Miller is ramping up his warnings on how he sees Britain tarnishing its centuries-old status as a global wealth hub by sparking an exodus of individuals claiming nondomicile status, from rich bankers in the city of London to multibillionaires.
“Alarm bells are ringing,” said Macleod-Miller, CEO of Foreign Investors for Britain, who on Sept. 4 was joined by about 40 members of the UK’s private wealth community, including almost a dozen British residents who are not domiciled in the UK for tax purposes. “The current proposals are perilous,” he said in an interview.
Under the current tax regime, non-doms — British residents whose permanent homes are considered to be abroad — don’t pay UK taxes on their overseas earnings for as long as 15 years. They can initially claim the status without any extra charges but eventually face annual costs of as much as £60,000 ($79,000) if they continue to live in Britain. They pay local taxes only on their earnings and income in the UK.
The wealth and high profiles of those revealed to have claimed the status — such as the Conservative Party’s onetime deputy chairman, Michael Ashcroft, and the wife of its current leader, Rishi Sunak, before she revoked it — has often made it a hot political topic over the past decade, especially in times of economic headwinds.
In March, the then-Conservative government bowed to pressure by requiring non-doms to pay tax on overseas income after living in the UK for four years instead of the current 15. At the time, the UK’s Office for Budget Responsibility estimated the move would raise around £3 billion a year. But Labour wants to go further. It has pledged and sought to raise more funds by eliminating inheritance tax breaks on assets that non-doms hold in overseas trusts.
“We are committed to addressing unfairness in the tax system,” a spokesperson for the UK Treasury said. “That’s why we are removing the outdated non-dom tax regime and replacing it with a new internationally competitive, residence-based regime focused on attracting the best talent and investment to the UK.”
With the UK’s standard inheritance tax rate currently set at 40%, the threat of significantly higher levies for non-doms on their global wealth through Labour’s reforms is causing them the greatest concern.
An Oxford Economics report commissioned by Foreign Investors for Britain found that more than 80% of non-doms cited those changes as a major reason they’re likely to leave the UK. That figure contrasts with a 2022 research paper that said fewer than 100 of those with the status would exit if the UK scrapped its non-dom regime.
Oxford Economics also said the UK could lose about a third of its current non-dom population by 2029-30, based on the firm’s survey of 72 non-doms living in Britain and 42 specialist tax advisers representing more than 900 clients claiming the status. Other notable non-doms in recent years include HSBC Holdings PLC's former boss, Stuart Gulliver, and billionaire steel magnate Lakshmi Mittal.
“Inheritance tax is almost always the biggest issue,” said Mark Davies, a tax adviser to the superwealthy. He added that dozens of his non-dom clients are leaving the UK for other territories including Dubai, Monaco and Switzerland. “It’s not looking very good for the country.”
Non-doms behind the efforts of Foreign Investors for Britain include a tech founder who employs more than a dozen people in the UK and usually gives away more than £1 million a year to philanthropic causes, according to anonymous case studies in the Oxford Economics report. The entrepreneur eventually plans to leave the nation if current non-dom reforms are imposed and would also relocate his family investment office from London to Zurich or New York, the report said.
Meanwhile, other non-doms have already finalized plans to exit the UK. They include Bassim Haidar, founder of the Dubai-based financial services firm Optasia and African telecommunications venture Channel IT, who has cited inheritance taxes as a main reason for leaving.
After exploring a move to Monaco, the Nigerian-Lebanese entrepreneur has settled on living in Greece, which joined Italy in establishing a preferential tax regime for foreigners similar to the UK’s system following its 2017 non-dom reforms. Haidar cited the breaks offered by Greece as a reason for exiting the UK, where the Conservative Party donor estimated that he’s accumulated a roughly £100 million property portfolio but has curbed further investments due to his relocation.
“The system is extremely favourable,” he told Bloomberg News by email regarding the regime in Greece, which allows its beneficiaries to avoid local income tax on their wealth outside the nation for a €100,000 ($111,000) annual fee for as long as 15 years. “I didn’t proceed with the purchase in the UK.”
To be sure, not all non-doms are leaving due to Labour’s changes, with some long-term residents set to remain in the nation. Many members of Britain’s wealthy elite are still optimistic about the UK. Labour’s outreach efforts to business leaders in recent years, for example, led to UK billionaires including Jim Ratcliffe and John Caudwell voicing support for the party before its election victory in July.
The number of non-doms has also already declined by almost half to 74,000 in the decade to April 5, 2023, partly from a 2017 change to the rules that stopped individuals from using the benefit permanently, latest figures show. Still, many of those who remain are major investors in the UK economy, with those in the Oxford Economics survey having invested £118 million each on average.
That’s despite the UK’s current non-dom system — which dates to 1799, when it was introduced to protect colonial investments — largely incentivizing those with the status to keep their overseas wealth outside Britain.
Macleod-Miller, who previously worked as legal adviser to John Malone’s Liberty Media and Hong Kong tycoon Li Ka-shing’s Hutchison Whampoa, was in the English countryside the month before Labour swept to power when he started making plans to establish what became Foreign Investors for Britain.
He and other supporters among Britain’s private wealth community aren’t fighting to get Labour to entirely scrap its plans. Instead, they’re pushing for a parallel system offering a flat-rate fee styled after Italy’s and Greece’s regimes, along with maintaining inheritance tax breaks on assets held in trusts based outside the UK.
For the Australian native and longtime UK resident, this may be one of the toughest fights yet after previously aiding parliamentary efforts on topics ranging from international gambling regulations to social reforms.
That’s especially because, unlike in previous non-dom reforms, the government isn’t providing any official period of consultation, limiting engagements with decision-makers.
“There’s so much to lose here,” Macleod-Miller said. “They are already leaving.”