News Event Summary
On 3 October 2026, IFA Magazine reported that the number of people filing a P85 — the HMRC form used to tell the tax authority someone is leaving the UK — rose to 69,000 in the 2025/26 tax year, up from 52,000 the year before, a rise of about 32%. The analysis, by accountancy group UHY Hacker Young, was also reported by Financial Planning Today on 29 September 2026. Both outlets quote Neela Chauhan, Private Client Tax Partner at UHY Hacker Young, attributing the increase to a string of UK tax changes and naming Italy, Switzerland and Sweden as destinations some leavers are reportedly choosing.
Three Key Takeaways
– The “one-third jump” refers to a specific HMRC form (P85), analysed by a private accountancy firm — not an official government count of how many people actually left the UK, and the two numbers move differently.
– The UK’s non-dom tax regime was replaced on 6 April 2025 by a four-year residence-based regime, and a related change means leaving the UK does not end UK inheritance tax exposure right away for people who were long-term residents.
– Destinations named in the reporting — Italy, Switzerland, Sweden — each run a different kind of tax arrangement, with different eligibility rules and a different trade-off, not a single “lower-tax” formula.
Who Should Pay Attention to This
This is most relevant to two groups already thinking about leaving the UK for tax reasons: long-term UK residents (including non-UK-domiciled individuals who used the old non-dom regime) who are weighing where to relocate before the next tax year, and people who have substantial assets likely to attract UK Capital Gains Tax or Inheritance Tax (IHT) regardless of where they live afterwards. For both groups, the question in the headline — “where is this money and these people actually going” — matters less than a narrower one: does leaving the UK actually end the UK tax exposure they’re trying to get away from. For many long-term residents, the answer is not immediately.
It is less relevant to short-term UK residents, people without significant UK-situs assets or worldwide income, or anyone expecting a one-off, universal “better tax deal” simply by relocating — each destination mentioned in the reporting has its own conditions, and none offers blanket relief from every UK tax exposure a leaver may carry with them.
What the Numbers Actually Show, and Where the Reported Outflow Is Going
Two different numbers, two different stories
The 32% increase comes from P85 forms — the form HMRC uses mainly to recalculate someone’s tax code and process a refund when they leave the UK, not a population register. UHY Hacker Young’s analysis found 69,000 P85 filings in the 2025/26 tax year against 52,000 the year before. That is a tax-administration data point, not an official migration statistic, and it likely undercounts actual departures since not everyone who leaves files the form — a limitation HMRC’s own guidance on the P85 does not claim to solve.
Alongside this, the Office for National Statistics (ONS) publishes the official migration count. Its provisional estimate for the year ending December 2025 puts British nationals’ net migration at around -136,000 (more British nationals left than arrived), with an estimated 246,000 British nationals emigrating — actually slightly down from an upward-revised 257,000 the year before. ONS describes the broader emigration trend as “broadly stable in recent years,” which sits awkwardly next to a headline reporting a one-third jump. The two data sets are not measuring the same thing: one counts a specific tax-admin filing among people who may or may not be UK nationals, the other is an official population estimate specifically for British nationals. Both can be true at once without contradicting each other, but neither should be read as confirming the scale implied by the other.
ONS has also been explicit that it does not track why British nationals leave, or where they go. Everything that follows about Italy, Switzerland and Sweden comes from the UHY Hacker Young commentary carried in the original reporting — an industry observation, not an official destination count.
What actually changed in the UK
The reporting attributes the rise in P85 filings to a cluster of UK tax changes since the last general election: increases to Capital Gains Tax and Inheritance Tax, higher Employer National Insurance Contributions, higher Stamp Duty on additional and rental properties, VAT on private school fees, and — reported separately — unused pension funds being brought into the scope of Inheritance Tax from April. The single structural change most relevant to internationally mobile individuals is the replacement of the non-dom regime.
From 6 April 2025, the UK replaced the old domicile-based “non-dom” remittance basis with a residence-based regime. New UK residents who have not been UK tax resident for the previous 10 tax years can now claim 100% relief on Foreign Income and Gains (FIG) for their first four years of UK residence; from the fifth year, worldwide income and gains are taxed in the ordinary way. This is a narrower, time-limited version of the old non-dom treatment, not a simple removal of relief — a distinction the reporting’s framing of “the UK is less attractive” does not fully capture on its own.
What a comparison table cannot skip: leaving doesn’t end UK Inheritance Tax right away
The most consequential — and least reported — part of the same 2025 reform concerns Inheritance Tax (IHT), and it directly answers the second half of the reader question: what should someone considering leaving the UK watch out for.
Under the new rules, anyone who has been UK tax resident for at least 10 of the last 20 tax years becomes a “Long-Term Resident,” and their worldwide estate falls within UK IHT. Leaving the UK does not end that status immediately. Instead, a “tail” period applies, scaled to how long the person had been resident:
| UK residence before leaving | IHT “tail” after leaving (continues to count worldwide estate) | Data basis |
|---|---|---|
| 10–13 out of the last 20 tax years | 3 tax years of continued exposure | HMRC Technical Note; Saffery, Deloitte and thepfs.org professional summaries (consistent) |
| Each additional year of residence above 13 | Tail extends by 1 additional tax year per year of residence | Same as above |
| 20+ out of the last 20 tax years (maximum) | Up to 10 tax years of continued exposure | Same as above |
| Any Long-Term Resident, after 10 consecutive tax years of non-UK residence | Long-Term Resident status resets even if the person later returns to the UK | Same as above |
In practical terms: someone who has lived in the UK for most of the last two decades and then relocates abroad for tax reasons can still have their worldwide estate counted for UK Inheritance Tax purposes for up to a decade after leaving. This single rule is arguably more relevant to someone weighing whether to leave than any comparison of destination tax rates, because it affects people who have already decided to go.
Where the reporting says people are going, and what each destination actually requires
Three destinations are named in the original reporting. Each runs a genuinely different kind of system — not a race to the lowest number.
| Destination | How the regime works | Who it is actually open to | Data basis |
|---|---|---|---|
| Italy | A flat annual tax on foreign-source income (not tied to actual income level); from the 2026 Budget Law, €300,000 a year for new tax residents from 1 January 2026 onward, plus €50,000 per qualifying family member. People who took up Italian tax residence in 2024–25 keep the lower rate (€200,000) they originally registered under. Italian-source income is taxed normally. Available for up to 15 years. | New Italian tax residents (effectively a high-net-worth regime, given the flat fee) | Outbound Investment Group and other professional summaries of Italy’s Article 24-bis regime (not read directly from Agenzia delle Entrate’s own page) |
| Switzerland | “Lump-sum taxation” (forfait fiscal): tax is based on living expenses — typically 5 to 7 times the annual rental value of the person’s Swiss home — rather than on actual worldwide income and wealth. Minimum tax base varies by canton, roughly CHF 400,000 to CHF 1 million. | Foreign nationals only, moving to Switzerland for the first time or after at least 10 years away, and only if they do not take up paid work in Switzerland. Several cantons, including Zurich and both Basel cantons, do not offer this regime at all. | Charles Russell Speechlys and other law-firm summaries of the cantonal lump-sum regime |
| Sweden | No inheritance tax or gift tax — abolished nationwide in December 2004. | Anyone subject to Swedish succession rules; this is a single-tax feature, not a general low-tax jurisdiction | Institute of Economic Affairs and related historical/economic-policy sources (an established historical fact, not a current threshold that changes year to year) |
None of these is a direct substitute for what someone may be trying to avoid in the UK. Italy and Switzerland both trade a flat, predictable charge for giving up ordinary income-based taxation — which can cost more or less than UK tax depending on someone’s actual income. Sweden’s advantage is specific to one tax (inheritance), not an overall “lower tax country” claim, and Sweden’s income tax rates are not lower than the UK’s.
Common Misconceptions and Risks
– “A one-third jump in P85 filings means a third more people actually left the UK.” It does not. P85 is a specific HMRC form tied to a tax-code and refund process; the figure is one accountancy firm’s analysis of filings, not an official population count, and ONS’s own emigration estimates for the same period describe the broader trend as broadly stable.
– “Leaving the UK ends UK Inheritance Tax exposure.” Not necessarily, and not immediately, for anyone who qualifies as a Long-Term Resident. The tail period (3 to 10 tax years, depending on how long someone lived in the UK) continues to apply after departure.
– “The new FIG regime is the same as the old non-dom regime, just renamed.” It is narrower and time-limited — four years of relief, available only to people who were non-UK tax resident for the prior 10 years, with full worldwide taxation from year five. It is not a like-for-like continuation of the old remittance-basis system, which could in some cases run for up to 15 years.
– “Italy, Switzerland or Sweden will automatically mean paying less tax.” Each depends heavily on individual circumstances — income level and source, family size, canton of residence in Switzerland, which tax (income vs. inheritance) matters most to the person — rather than offering a guaranteed lower overall burden.
– “Once I’ve registered as non-UK tax resident, I’m fully outside the UK tax system.” Long-Term Resident status for IHT purposes, and any UK-situs assets or UK-source income, can continue to matter for years after someone’s residence status changes. UK tax residence rules and a person’s ongoing exposure are separate questions that need to be checked individually, based on official guidance current at the time.
Scenario Examples
A long-term UK resident weighing a move before the next tax year. Someone who has lived in the UK for 18 of the last 20 years is comparing Italy’s flat-tax regime against staying put, mainly because of rising Capital Gains Tax. Before focusing on the destination’s tax rate, the more immediate question for this person is the IHT tail: having been resident for close to the maximum qualifying period, a relocation would not remove UK Inheritance Tax exposure on their worldwide estate for several years after leaving — a factor that changes the real cost-benefit of moving, independent of which country they choose.
A newly arrived UK resident assessing the FIG regime. Someone who moved to the UK in 2026 after 12 years based entirely overseas is assessing whether the four-year Foreign Income and Gains regime is worth claiming. Because they meet the “non-UK tax resident for the prior 10 years” condition, they may qualify — but the relief only covers the first four years, after which worldwide income is taxed in the ordinary way, a materially different shape from the old non-dom system some advisers may still describe informally in outdated terms.
Someone drawn to Switzerland by the “flat tax” headline. An individual considering Zurich specifically, having read general reporting about Swiss lump-sum taxation, finds that Zurich does not offer the lump-sum regime at all — it is a cantonal arrangement, not a national one, and eligibility also requires not taking up paid work in Switzerland. The “flat tax” story needs to be checked against the specific canton and the person’s own employment plans before it can be treated as relevant.
Frequently Asked Questions About UK Tax-Driven Emigration
Is the reported “32% increase in people leaving the UK” an official government statistic?
No. It is UHY Hacker Young’s analysis of HMRC P85 form filings, reported by IFA Magazine and Financial Planning Today. The Office for National Statistics publishes the official migration estimates separately, and its most recent figures describe the broader emigration trend for British nationals as broadly stable rather than sharply rising.
Does leaving the UK immediately stop me from owing UK Inheritance Tax?
Not necessarily. Anyone who qualifies as a Long-Term Resident (UK tax resident for at least 10 of the last 20 tax years) remains within scope for a “tail” period after leaving — from 3 up to 10 tax years, depending on how long they were resident. The status only resets after 10 consecutive tax years of non-UK residence.
What replaced the UK’s non-dom regime, and who can use it?
From 6 April 2025, a four-year residence-based Foreign Income and Gains (FIG) regime replaced the old domicile-based non-dom system. It is available to new UK residents who were not UK tax resident for the previous 10 tax years, giving 100% relief on foreign income and gains for four years before worldwide taxation applies from year five.
Why are Italy, Switzerland and Sweden specifically mentioned as destinations?
They were named by a UHY Hacker Young tax partner in the original reporting as places some UK leavers are reportedly choosing. There is no official government or statistical data confirming destination numbers — ONS has stated it does not track where British nationals go after leaving.
Does moving to a flat-tax country like Italy or Switzerland always mean paying less overall tax?
Not automatically. Both regimes replace ordinary income-based taxation with a fixed annual charge that can be cheaper or more expensive than a person’s actual UK tax bill, depending on their income level, family size and (for Switzerland) which canton they live in. Eligibility conditions also apply — for example, Switzerland’s lump-sum regime excludes anyone taking up paid work there, and several cantons do not offer it at all.
Important Disclaimer
This article is a general information summary, not legal, tax, financial or immigration advice for any individual case. It draws mainly on UK government (HMRC, HM Treasury) and Office for National Statistics sources published in 2024–2026, together with professional-services summaries of those rules, and on media reporting of a named accountancy-firm analysis for the news event itself. Specific rules, thresholds and figures can change, including through future Budgets. Readers should confirm current requirements against official UK government guidance and, where a decision depends on individual circumstances, consult a qualified tax or legal professional before acting.
Rules described here are current as of October 2026, based on HMRC and ONS publications cited above; readers should check gov.uk and ons.gov.uk for any later updates.
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References
HM Treasury/HMRC – Technical Note: Reforming the Taxation of Non-UK Domiciled Individuals / GOV.UK – Get Your Income Tax Right If You’re Leaving the UK (P85) / Office for National Statistics – Long-term International Migration, Provisional, Year Ending December 2025 / Office for National Statistics – UK Emigration Explained: What We Know About Brits Moving Abroad / IFA Magazine – Number of People Leaving the UK Jumps by a Third as More People Seek a Better Tax Deal / Financial Planning Today – Number of Taxpayers Quitting UK Rises by a Third / Saffery – Inheritance Tax Reforms for UK Non-Doms / Deloitte Tax Scape – Reform of the UK’s Non-Dom Regime, Inheritance Tax and Trusts / The Personal Finance Society – New HMRC Guidance: IHT and Long-Term Residence / Outbound Investment Group – Italy Officially Raises Its Flat Tax to €300,000 for New Residents / Charles Russell Speechlys – Relocating to Switzerland: Lump-Sum Tax Regime / Institute of Economic Affairs – How High-Tax Sweden Abolished Its Disastrous Inheritance Tax
