From the UK to Milan: The post-Brexit wealth migration and its social costs

Almost a decade ago, on 23^rd June 2016, 51.9% of British voters backed the United Kingdom’s withdrawal from the European Union, a divorce that over the years has proven costly for the country. The loss of full access to the single market has exposed the manufacturing sector to non-tariff barriers that have sharply reduced the competitiveness of British exports. Even the service sector, despite having grown since 2019, is estimated to have underperformed its counterfactual no-Brexit trajectory, reflecting the impact of new regulatory barriers, according to the Office for Budget Responsibility.

Business investment has been hit particularly hard. After a brief period of growth pre-referendum, it largely stalled,.Some estimates attribute a decline of around 10% in investment by 2022 to Brexit. 

A notable change in this regard can be observed in the venture capital (VC) market. Prior to its withdrawal, the UK had established itself as Europe’s leading investment hub, absorbing over 30% of total European VC investment. The uncertainty generated after 2016 has strongly weakened the appeal of British startups for institutional investors by reducing innovation potential and attractiveness to skilled workers from abroad.

Within this already-fragile economic context, the replacement of the non-domiciled tax regime represents a further significant policy shift. This system offered very favorable tax treatment to wealthy individuals with a foreign tax domicile, allowing them to live in the UK while keeping offshore income exempt from domestic taxation. According to media reports and financial analysts, the phase-out of this regime, together with the post-Brexit effects, is having tangible impacts, particularly in Italy.

Introduced in 2017 and revised in 2024, Italy has offered ultra-wealthy residents a flat-tax system that allows them to pay a fixed annual levy of €200,000 on foreign-source income, regardless of its amount. Between 2017 and 2022, according to the Italian Ministry of Finance, 2,730 individuals opted into the so-called “CR7” tax regime. 

With the gradual abolition of the UK’s non-dom status, Italy seems to have emerged as a particularly attractive hub for wealthy individuals relocating from the UK. In particular, Milan has emerged as the preferred destination due to its strong links across Europe, a rhythm of life familiar to London workers and easy access to the Italian seaside, lakes, and mountain resorts. 

This substantial inflow has boosted transaction volumes in both the luxury sector and the real estate market, where prices continue to rise, leading to increased investment and accelerated gentrification. Within this context, Milan has not only become an ideal destination for the wealthiest but has also secured a place at the top of the global ranking of safe-haven cities for millionaires. 

According to Henley & Partners’ annual report, 1 in every 12 residents registered in the city qualifies as a millionaire, with liquid assets exceeding one million dollars net of real estate. For comparison, the same ratio is 1 in 22 in New York City, 1 in 41 in London and 1 in 54 in Rome.

Moreover, Milan’s growth shows no sign of slowing. The same study projects strong future expansion for the Lombard capital, alongside cities such as Dubai and Miami. However, even though the attraction of wealth can represent an important asset for a country, it is important to emphasize that Milan’s social fabric is increasingly composed of people facing growing economic strain.

Residents in the city’s outskirts have mobilized against evictions, gentrification and the unaffordable cost of living. At Christmas in 2025, outside the charitable organization Pane Quotidiano near Bocconi University, a line of Italians, pensioners and foreign residents stretched for over two hours waiting for a bag of food and toys. In addition, over the years, the right to education has been severely affected as covering the costs of supporting a child living in the city has become too difficult, especially for lower-income families. 

Italy and the UK now face a common challenge of rebuilding stability. Italy should primarily address this task from a social perspective, as rising inequalities strain urban cohesion, while the United Kingdom ought to pursue stability mainly through economic recovery and long-term growth. Will either country succeed?

The author is a guest writer from Università Bocconi's student newspaper, Tra i Leoni. Find out all of the articles from our Winter Olympics feature here.