From London to Lombardy

The publication of the 2025 Sunday Times Rich List marked a historic turning point: the number of UK-based billionaires has declined to 156, down from 165 in 2024. This represents the sharpest fall in the list’s 37-year history. While changes in the fortunes of individual entrepreneurs may contribute to such movements, the broader trend reflects a significant and accelerating shift, particularly among international high-net-worth individuals formerly resident in the United Kingdom.

The abolition of the UK’s non-domicile (non-dom) tax regime in April 2025 has reshaped the landscape for internationally mobile individuals. With the UK now a less hospitable tax environment for those with substantial overseas income and assets, alternative jurisdictions have risen in prominence. Chief among them is Italy, and specifically Milan, which has become a focal point of interest for families seeking to relocate.

ITALY’S LUMP-SUM TAX REGIME

Italy’s Lump-Sum Tax Regime (“LSTR”), more recently being referred to as the “svuota Londra” (“empty London”) initiative, has garnered renewed attention. The regime, introduced in 2017 and revised in 2024, allows qualifying new residents to pay an annual fixed tax of €200,000 on all non-Italian sources of income and gains. No further tax is due on remittances of such amounts, and participants are exempt from reporting their overseas assets to Italian authorities. Assets held outside of Italy are also not subject to wealth, inheritance or gift taxes.

This fixed-tax arrangement is effective for up to 15 years, and qualifying additional family members can be covered for an extra €25,000 per person per annum. For individuals with significant non-Italian income, this offers not only fiscal predictability but also a degree of simplicity rarely found in international tax planning.

Importantly, those who took advantage of the regime prior to August 2024 remain taxed at the previous €100,000 rate under grandfathering provisions – a contrast to the UK’s more abrupt approach to reforming its non-dom framework.

WHY MILAN & WHY NOW?

In an environment where high-net-worth individuals increasingly weigh personal and family lifestyle considerations alongside tax planning, Milan presents a compelling overall package.

1. Infrastructure: As Italy’s financial and business capital, Milan offers modern amenities, international schooling, and strong connectivity across Europe. While infrastructure challenges remain in parts of the country, Milan stands apart in its ability to cater to the expectations of global families.

2. Legal Stability: The LSTR has remained intact through five successive Italian governments, including those on both the left and right of the political spectrum. This continuity has bolstered its credibility and suggests that, for the foreseeable future, the regime will remain available to eligible applicants.

3. Lifestyle: The city combines cultural depth with commercial energy. For individuals accustomed to London’s pace and amenities, Milan offers a familiar rhythm with the added benefit of access to the Italian lakes, Alps, and Mediterranean coastline within a few hours’ reach.

THE UK’S TAX REFORM & THE IMPETUS TO RELOCATE

Labour’s first Budget in October 2024 introduced the long-anticipated end to the traditional non-dom regime from April 2025. The key reforms include:

1. The replacement of the remittance basis with a far more limited exemption on foreign income and gains, now only available for the first four years of UK tax residence;

2. The removal of the concept of domicile, such that individuals’ worldwide assets are within the scope of Inheritance Tax (“IHT”) if they’re a ‘long-term resident’ (i.e. UK tax resident for 10 out of the previous 20 years) ; and

3. A tightening of the rules around trusts, with no grandfathering offered to existing “excluded property” structures, such that assets held in non-UK resident trusts will fall within the scope of Ten Year Charges (an IHT charge of up to 6% levied every 10 years on the anniversary of the trust) and exit charges if the settlor becomes a ‘long-term resident’.

These reforms have caused many families to reconsider their UK tax planning strategies. For those whose wealth is largely held or generated offshore, remaining in the UK may no longer be sustainable or commercially prudent.

It is not just those who were formerly non-UK domiciled that have considered leaving (or already have left) the UK. Wealthy entrepreneurs who may have left the UK just before selling their businesses and looking to return after 6 years of non-residence are now considering remaining outside of the UK indefinitely, and at the very least more than 10 years, so as to no longer be within the scope of IHT.

ASSESSING THE ITALIAN REGIME’S PRACTICALITIES

While the Italian LSTR is undeniably attractive on paper, individuals should conduct detailed due diligence before making a permanent relocation decision. Key considerations include:

1. Italian-source income is not covered by the regime and is subject to standard progressive tax rates.

2. Political risk, though muted thus far, is always a consideration in jurisdictions where coalition governments and fiscal reform are perennial features of the landscape.

3. Operational readiness, particularly in areas such as banking, compliance, and wealth management, may require adjustments for those accustomed to the institutional infrastructure of London or Zurich.

Nonetheless, the recent rise in uptake of the regime (nearly 1,000 individuals in 2022 alone, according to Italian government figures) indicates that these practicalities are being successfully managed by many of those who have already made the move.

HUNDLE’S PERSPECTIVE: PLANNING WITH CLARITY

At Hundle, we believe that the decision to relocate should be informed not only by the tax regime in question, but by a holistic view of a family’s objectives, whether those relate to intergenerational wealth planning, business continuity, education, or lifestyle.

Our role is to assist clients in:

1. Evaluating jurisdictional options based on a comprehensive assessment of financial, legal, and practical factors.

2. Modelling comparative tax exposures under different scenarios.

3. Coordinating the transition, including legal, structuring, and compliance requirements both in the UK and overseas.

We are also well positioned to work with clients who may wish to use Italy as a temporary jurisdiction, what some are calling a “stepping stone”, en route to other locations such as Switzerland, pending clarity on proposed inheritance tax reforms in those jurisdictions.

LOOKING AHEAD

Milan is not the only destination capturing attention. In our next article, we will examine the rising popularity of Dubai as a relocation hub – offering tax neutrality, fast-track setup, and a global lifestyle. As jurisdictions adapt to attract or retain mobile wealth, we remain committed to providing our clients with measured, well-informed guidance at each step of the journey.

To learn more about how Hundle can support your international wealth planning strategy, please get in touch with our Wealth Structuring team.