00:01Nestled away on a leafy street in one of Milan's most stylish neighbourhoods
00:06lies the former home of famed fashion executive Santo Versace.
00:11Take a step inside and you'll enter the wild,
00:13a private club catering to Milan's rapidly growing wealthy class.
00:17The wonderful thing about Milan, it's an hour and a half by plane from London.
00:21You can drive to the south of France in two and a half hours,
00:24you can drive to the beach in a couple of hours,
00:26you can be in San Maritz in an hour and a half.
00:28Darry Landsberg's been heavily involved in private clubs in London.
00:32So my first foray into private clubs was with a great club, the Arts Club,
00:38which was founded in 1863 by Charles Dickens.
00:42And I was fortunate enough to be able to, with my partners, acquire the business.
00:47It's got an amazing history and clubs go back to the late 1800s in London.
00:53You have Brooks, Whites, all these amazing clubs.
00:57Amazing clubs.
00:58Boodles.
00:59Boodles.
01:00But Gary opened the Wild last year, a club emblematic of a global wealth movement
01:04into places like Milan, Monaco and the Middle East, away from London.
01:09Private clubs, if you go back to the 1800s, I think there was something like 300 clubs at the time.
01:15There was a lot.
01:16And, you know, over the years they've evolved.
01:19In 2025 in London, people still like going to private clubs, but unfortunately a lot of the clientele have actually left.
01:26And that's due in part to the UK government abolishing the so-called non-DOM regime.
01:32We will raise specific taxes. We want to end the non-DOM status completely. I think that the super rich should be paying their tax.
01:43It is a term relatively unique to the UK and it's short for non-domiciled.
01:49So it refers to people who have, or until very recently, have had special tax treatment because they were considered non-domiciled in the UK,
01:58meaning that their permanent home is in a different country.
02:02Nina Skero is the CEO at the Center for Economics and Business Research in London.
02:07Previously, a non-DOM would avoid UK tax on foreign income and pay a small fee after a few years.
02:13Now they won't pay tax for the first four years, but then they'll be taxed like everybody else on their worldwide income.
02:20In short, it's the beginning of the end of the non-DOM regime.
02:23So it is a big tightening of the rules.
02:26The previous big change was in 2017 under the Conservative government,
02:31where they essentially capped the period at 15 years.
02:35They said, if you've been here for 15 of the past 20 years, you can't really genuinely say that you're not a non-DOM.
02:43But this is now making the rules all the tighter.
02:47Manchester United owner Jim Ratcliffe famously relocated from Britain to Monaco in 2020
02:53in a move that was expected to save him £4 billion in tax payments.
02:58I wasn't a fan of the non-DOM change. I thought that was very foolish.
03:02I mean, you've got 60,000 very wealthy people in London.
03:04Why do you want to encourage them to leave?
03:06It doesn't make any sense to me.
03:08Because they all bring, you know, enormous value to that economy.
03:12And now he's being joined by fellow football club owners, banking executives and real estate magnets in departing Britain.
03:20Last year, the UK had a net loss of almost 11,000 millionaires.
03:24A 157% jump from a year before, which was already the highest number in a decade.
03:29I think the numbers that will come out in 2025 will be shocking.
03:34Really?
03:35I think will be shocking. The trickle down effect on the economy is huge.
03:40Everyone who leaves will have people that work from, whether it's in their business, in their office, in their home.
03:47And how is it directly impacting your business, your investment strategy?
03:51Well, I think, you know, for someone that was pretty much heavily invested in London, I'm completely divested from London.
03:59I have nothing here. I have a few real estate investments, but I'm certainly not looking at this stage to invest back into London in the short term.
04:08But the government is confident it's made the right decision.
04:12Are you concerned that your non-dom tax changes will cost more than they raise?
04:17No, I'm not concerned. We made a manifesto commitment to ensure that non-doms do pay their fair share of tax in the UK.
04:23Yeah.
04:24But combined with a temporary repatriation facility, which makes it easier for people to bring money into the UK without facing punitive tax.
04:32This is a highly mobile group of people, but as well as people leaving the UK for a whole variety of reasons,
04:38we have every year thousands of people, including some of the wealthiest people, come to the UK
04:43because they can see that this is a great place to do business, a great place to grow a business.
04:48The government's independent Office for Budget Responsibility estimates that 12% of non-doms will leave the UK,
04:55but that the new regime will offset that by raising almost 34 billion pounds over the next five years.
05:02Nina Scaro isn't so sure.
05:04I think there's very, very good reason to think that the government departments are underestimating the extent to which people are going to either leave the UK
05:14or people that would have come to the UK otherwise aren't going to come.
05:18And what we have found is that tipping point, where is the government making money, is the government losing money net, is around one in four.
05:28So if more than a quarter of non-doms, people currently claiming the status, are no longer in the UK,
05:35that is the point at which the government actually starts losing money.
05:39And looking at the OBR's own estimates and some other external estimates for how many people might consider leaving the UK as a result,
05:4725% is very, very much within the realm of possibilities.
05:51So if you're asking yourself, do I want to go to the UK? Do I want to stay in the UK?
05:55Is this a good place to start a business, to grow a business?
05:58There is more and more ticks in the no column.
06:01Are you saying that it could affect London's status as a global financial hub?
06:05Yeah, and I think absolutely changes to non-doms is putting a bit of a damper on the status of London globally.
06:12And that's kind of a continuation, a little bit of a trend.
06:15So if not London, why Milan? That's where Marco Cerato comes in.
06:21I'm an Italian tax lawyer, so specialised in tax, and in that field it means about taxation of corporation, taxation of individuals.
06:32I would say that my personal practice increased towards taxation of individuals in the past years because of the new rules.
06:43The new rules to which he refers are Italy's flat tax regime. Individuals pay a flat 200,000 euros a year on foreign income for up to 15 years.
06:53A figure that was doubled last year.
06:55You've got all of the fiscal pressures, not just in Italy, but across Europe and around the world.
06:59How likely is it that this flat tax can endure? Because of course it's already gone up from 100,000 to 200,000. Can it last?
07:06The decision of the government back in August 2024 to double the tax from 100,000 to 200,000 has been indeed considered by foreign observers from my field as a confirmation of the willingness of the government to keep the regime rather than an indicator that the regime might be unstable.
07:29Consider that this regime is there since 2017 has never been changed apart from this increase, which has an inflation component because don't forget it was introduced eight years ago.
07:41So there was an inflationary period and also there was the willingness of the government to contain discussions or debates about the fairness of this regime.
07:52Because by increasing and doubling the tax, they have willingly restricted the amount of unearthed individuals moving to Milan, thereby reducing the discussion about the fairness.
08:07Cerato has spent most of his life in Milan and has watched the city evolve.
08:11Well, Milan changed a lot in the last 50 years. At the beginning it was an industrial city. During the years it became a service city.
08:21It attracted a lot of people. So 50 years ago most of the people, at least the people who were wealthy were Milanese. Now it's very difficult to find somebody who is purely Milanese.
08:36Yet an influx poses its own problems. Real estate in Milan has comfortably outpaced wage growth over the past decade with prices rising 49%, while other major Italian cities have stayed largely flat or even decreased.
08:49It's quite a small city. It's quite condensed. So they don't have a lot of huge developments going on.
08:55There's been a big influx of expats. They all pretty much want to live in the same area, which makes it quite difficult.
09:04First, for them to finance these spaces. And second of all, because there's not a lot of supply and there's a huge amount of demand.
09:13What's happening, the local community actually is getting outpriced because they haven't seen prices like this before.
09:19The good quality Milan real estate is certainly seeing a huge increase in values.
09:26Would you say that Italy is more aware that it's in a global competition to attract high net worth individuals than, for example, the UK government?
09:34I'm not so sure the government is so keen in entering into a global competition to attract these people.
09:43They just realized that it's good to have people from abroad with high spending capacity making investment.
09:51This regime was introduced by a left wing government. This kind of government is a right wing.
09:59Meanwhile, there were, I think, seven governments of different colors.
10:03All the different parties looked at this regime and decided to keep it.
10:08So paradoxically, the political instability of Italy has been the best test to consider this as a stable tax regime.
10:18Italy's government might not consider itself in a competition to attract the wealthy, but it is doing just that.
10:24And Landsberg says the UK faces an uphill battle to lure them back.
10:28You'll get the results of 25 and 26. They'll start talking about it.
10:33They'll start probably tweaking with it by 27. And then everyone will be worried about an election in, I think, 29.
10:41And if you've kind of been around long enough, you kind of see the patterns.
10:45And, you know, I think, you know, they're not going to they're not going to turn the ship around today.
10:50And in the meantime, they can always look east to Italy.
10:54I keep repeating my clients that Italy is a very bad place to work if you are an Italian professional or employee because you pay a lot of taxes on your income.
11:03But it's a very nice place to die because there is a net of the flat tax regime.
11:10There is a very favorable regime on inheritance and gifts.
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