Relocating to Hong Kong Just Got Much More Attractive for UK Nationals

London has been the natural home for UK nationals building careers in finance, law and investment management. But the calculus is changing. A combination of a post-war record taxation burden, changes to how domicile is applied to death duties, and a sweeping set of new incentives in Hong Kong for the asset management industry means that senior professionals and wealthy individuals now have a genuine, well-established alternative, one that offers lower personal tax, a globally connected financial centre, and a materially different approach to inheritance.

Relocating overseas is a momentous step for most people, though it is one that British nationals have a history of taking. Continental Europe, the U.S., Australia, Canada and also Hong Kong, have long been popular destinations for adventurous Brits. Indeed, in recent years the pace of movement has accelerated, with around 250,000 UK nationals emigrating each year since 2021, according to the UK’s Office for National Statistics.

While there are myriad and often personal reasons people leave, UK surveys repeatedly show concern at the ever rising taxation burden as well as red tape barriers to running prosperous businesses. Promises to boost UK economic productivity and growth have been hallmark slogans of successive prime ministers, each of whom has failed in their own way to kick start an economy hit in recent years by the double blow of exiting the European Union and the Covid outbreak.

The outflow has become so noticeable that a recent spate of high profile UK-based hedge fund manager departures even led to British lawmakers asking questions about the country’s ability to retain talent and wealth. UK Shadow Chancellor Andrew Griffith pointed out that the amount of annual tax paid by recently departed hedge fund trader Chris Rokos was the same as the tax receipts of 38,000 average income tax payers.

Pro-growth Policy Approaches

Hong Kong’s economy also struggled in the pandemic, but in contrast to the UK’s, has since bounced back, aided by a targeted series of pro-business and pro-growth reforms.

“There is a clear difference in approach between Hong Kong and UK governments when it comes to crafting business friendly policies aimed at growing the economy,” says Gavin Cumming, Partner and Head of London at Timothy Loh. “Hong Kong is very focused right now on reducing the cost of running a business and on luring talent from the UK and elsewhere.”

Hong Kong’s GDP grew 3.5% last year and is forecast to grow as much as 4.5% in 2026 supported by a vibrant financial sector that saw the city’s stock exchange top the global leaderboard for most money raised at IPO. The pick up in business expansion has been aided by successive reforms aimed at attracting talent and businesses to the city. These include a talent visa scheme, a new capital investment entrant scheme for wealthy families, cuts to property stamp duty, and various fiscal and consumer stimulus plans.

Also included are a raft of tax friendly policies to attract private markets firms and family offices to the city. Rule changes under debate in the city’s legislature could ensure private market fund managers and family office managers are exempt from paying tax on carried interest and performance fees. This concession could become applicable to a wide range of managers, including private equity, hedge funds, private credit, real estate and digital asset managers.

Wealthy families have noticed: By year-end 2025, the number of single family offices in Hong Kong had grown 25% over two years to 3,384, according to government data. Those businesses bring an estimated HK$12.6 billion ($1.6 billion) annually to the local economy through operating expenditure alone, and directly create over 10,000 full-time professional positions across high value-added fields such as financial advisory, legal and accounting.

Estate Duty Elimination

The appeal of Hong Kong for British nationals took on additional significance last year after changes to long standing domicile rules made it easier to escape UK inheritance tax laws. Until 6 April 2025, an individual's liability to UK death duties depended heavily on the old concept of domicile. That regime, which had existed in some form for more than two centuries, was abolished and in its place, the UK moved to a residence-based system. In a nutshell, this can make it easier for wealthy British nationals living abroad long enough to reduce their inheritance tax exposure.

By contrast, Hong Kong abolished estate duty in 2006. There is no inheritance tax or gift tax on lifetime transfers. In addition, salaries tax is capped at a maximum of 15% (with progressive rates that are typically lower still), there is no capital gains tax, no VAT or sales tax, and no tax on dividends. Recently introduced rules mean hedge fund and private market fund managers will no longer pay tax on carried interest.

“For a UK financial professionals who establish genuine residence in Hong Kong, this is a materially different financial outcome,” says founder Timothy Loh. “Combined with Hong Kong's territorial tax system, under which only Hong Kong-sourced income is generally taxed, the jurisdiction offers a level of certainty around long-term wealth preservation that is increasingly difficult to replicate onshore in the UK.”