In a significant shift in the UK’s economic landscape, billionaire steel magnate Lakshmi Mittal is reportedly contemplating leaving the country due to the government’s recent reforms targeting non-domiciled residents. The Financial Times (FT) has reported that Mittal, who has lived in the UK for nearly three decades, is exploring his options following the Labour government’s decision to abolish the ‘non-dom’ tax regime, which allowed wealthy individuals to avoid paying taxes on their foreign income.
Mittal, whose fortune was valued at £14.9 billion in 2024, ranks as the seventh richest person in the UK according to The Sunday Times. He is known for his extensive real estate holdings, including a mansion on Kensington Palace Gardens in London, which he purchased from former Formula 1 chief Bernie Ecclestone in 2004 for £67 million, then the most expensive home in the world. This potential departure from the UK places Mittal among a growing number of affluent individuals reconsidering their residency in light of the new tax policies.
The abolition of the non-dom regime, announced by Labour Chancellor Rachel Reeves in her October 2024 Budget, aims to close tax loopholes that have allowed individuals to shield offshore income from UK taxation. Mittal’s associates have indicated that he is seriously considering his future in the UK, stating, “He is exploring his options and will take a final decision over the course of this year.”
According to the FT, the elimination of the non-dom status has already prompted many wealthy individuals to look for more favorable tax jurisdictions, with the United Arab Emirates, Italy, and Switzerland emerging as popular destinations. The non-dom regime, which had been in place for 226 years, allowed UK residents who declared their permanent home to be overseas to avoid paying British taxes on income earned abroad. Critics argue that this reform could drive away high-income earners, negatively impacting the UK’s economy.
“It’s driving them back into places like Milan, Monaco, and Dubai. We cannot afford to lose those moneymakers,” said John Caudwell, the billionaire founder of Phones 4u, expressing concerns over the potential economic consequences of the Labour government’s tax reforms.
Furthermore, the UK tax laws impose strict limits on individuals who choose to leave but maintain ties to the country. Non-residents can only visit the UK for up to 90 days a year and can work no more than 30 days within that period. This restriction further complicates the decision for individuals like Mittal, who have significant business interests and personal ties in the UK.
Mittal’s decision to potentially leave comes at a time when the Labour government is facing scrutiny over its economic policies. Since taking power in July 2024, Labour has moved to abolish the non-dom tax regime, which has been a key aspect of their economic agenda. The government is eager to close tax loopholes that disproportionately benefit the ultra-wealthy, despite concerns that these changes may lead to a loss of tax revenue as wealthy individuals consider relocating.
The implications of Mittal’s potential departure could be significant, not only for his businesses but also for the UK’s economy as a whole. With the country having lost 10,800 liquid millionaires in 2024 alone, the exodus of high-net-worth individuals raises questions about the sustainability of the UK’s tax revenue and economic growth. In comparison, only China experienced a greater loss of millionaires during the same period.
In addition to his property in Kensington, Mittal has been investing in real estate in Dubai and owns several other properties across Europe, the US, and Asia, including a ski chalet in Switzerland. His company, ArcelorMittal, remains a significant player in the global steel industry, with the Mittal family retaining a 40% ownership stake in the firm, valued at approximately €24 billion.
As the deadline for the new tax regulations approaches, which are set to take effect on April 6, 2025, wealthy individuals like Mittal are weighing their options carefully. The Labour government’s reforms, which also include eliminating the use of offshore trusts to avoid inheritance tax, reflect a broader push for tax equity. However, the potential backlash from affluent residents raises concerns about the long-term effects on the UK’s attractiveness as a destination for investment.
Mittal’s history with the Labour Party adds another layer of complexity to the situation. Once a significant donor under former Prime Minister Tony Blair, contributing over £4 million, he has shifted his political contributions more recently towards the Conservative Party. This change in allegiance underscores the growing frustration among wealthy individuals regarding the current government’s policies.
As discussions surrounding the new tax regime continue, the government remains firm in its stance, emphasizing the need for a fair and progressive tax system. A spokesperson for the Treasury stated, “Our tax system is fair and progressive and keeps the UK an attractive place to live while supporting the public investment needed to drive growth.” However, the departure of high-profile individuals like Mittal could challenge those assertions.
In summary, Lakshmi Mittal’s contemplation of leaving the UK highlights the delicate balance the government must strike between ensuring tax fairness and maintaining an attractive environment for wealthy individuals. With the potential loss of significant tax revenues and investment, the implications of such decisions could reverberate throughout the UK economy for years to come.
