However, for it to be effective it must be paired with a tax system that incentivises people to stay for the long-term. It is not enough just to offer a route in — the UK must simultaneously offer a tax framework that retains that wealth by making long-term residency attractive.

Wealthy individuals do not look at visa schemes in isolation when making relocation decisions; tax policy plays a central role, particularly for families considering putting down lasting roots.

Before looking at the reasons why both an investor visa and tax reform are needed, it is important to first explore how we got here. The government is reportedly looking at bringing back the investor visa alongside other initiatives such as potentially extending the new four-year foreign income and gains regime, as it seeks to stem the exodus of non-doms and wealthy individuals.

Ever since the abolition of the non-dom regime and removal of the inheritance tax protections on foreign assets, the UK has seen a significant flight of wealth. This policy decision eroded the UK’s appeal as an international hub for wealth, leaving the country on the back foot and at a competitive disadvantage compared to other jurisdictions.

At present, there is no dedicated investment route into the UK and no tax incentives to remain past four years. The high-profile visa routes — Tier 1 (Investor) and Tier 1 (Entrepreneur) closed in 2022 and 2019 respectively amid concerns over abuse and security. Despite these shortcomings, both schemes were highly effective in attracting capital with estimates suggesting over £10bn in direct investment was channelled into the UK since 2008, supporting businesses, jobs and infrastructure.

Similarly, the non-dom regime — while not perfect — attracted wealthy individuals to the UK on a long-term basis who contributed significantly to overall tax revenue. In its final year, approximately 73,700 individuals claimed non-domiciled status and contributed circa £9bn in taxes.

It needed modernising not abolishing, and its replacement with the Fig regime is internationally uncompetitive as it is very short-term in nature and doesn’t incentivise families to establish long-term roots in the UK.

Meanwhile, other countries are capitalising on this outflow from the UK by pairing investment-linked residency routes with stable, competitive tax propositions. Italy and Switzerland remain strong draws for families seeking long-term certainty through established flat-tax or lump-sum regimes, while the UAE offers long-term residency alongside a highly attractive personal tax environment.

Portugal and Greece continue to operate well-known residency-by-investment programmes, and the US recently introduced its gold card route offering fast-tracked residency for individuals with significant capital to invest or donate.

To help Britain reassert itself as a competitive global hub for mobile capital, an investor visa coupled with a more attractive tax regime is needed to both attract and retain wealthy individuals.

An investor visa would bring immediate economic and fiscal benefits by attracting HNWIs and global talent, potentially unlocking billions in fresh capital and stimulating priority sectors such as AI, life sciences and clean energy by tying residency to strategic investments. It could also generate predictable government revenues through application charges or fixed annual fees tied to residency, potentially reducing reliance on raising taxes for domestic workers.

Alongside this, the government needs to consider a more competitive tax regime, drawing on successful international models. For example, it could look at spending-based taxation, similar to Switzerland’s model, where individuals are taxed on what they spend in the UK rather than overall wealth or income.

Other options include sliding scale tax rates for new arrivals with lower rates in the early years gradually aligning with resident regimes over time, or an annual flat charge for wealthy non-dom or new residents, as seen in Italy. The latter is simple, predictable and appeals to globally mobile families and entrepreneurs.

While political parties across the western world are increasingly turning their sights towards the wealthy to fix rising fiscal problems, this approach often underestimates just how mobile capital has become.

While no one is advocating a race to the bottom on tax, ultimately people want a fair and predictable system that allows them to plan for the long-term. By striking the right balance and introducing an investor visa alongside a competitive tax regime, the UK can attract wealthy individuals and reap the benefits of a broader tax base, higher investment, job creation and economic growth.

Marc Acheson is global wealth specialist at Utmost

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