Taxation and Migration by the Super-Rich

Arun Advani, David Burgherr and Andy Summers

No 11870, CESifo Working Paper Series from CESifo

Abstract: We study international migration responses of the super-rich to taxes using UK administrative data and a difference-in-differences design. We exploit a reform that removes access to a tax break on foreign income for foreigners based on their number of years in the UK, allowing us to compare individuals with similar incomes and wealth. The reform reduces the net-of-tax rate of affected taxpayers by 19%. Emigration flows increase significantly in response, but only temporarily. Overall, the number of affected super-rich in the UK decreases by 0.26% for a 1% decline in the net-of-tax rate. Those who remain UK-resident increase reported income and income tax by around 50%, driven by foreign income coming into scope of UK tax, rather than investments being onshored. Emigrants induced to leave by the reform pay substantially less tax, but more than half still report non-zero UK income three years after leaving. By contrast, emigrants unaffected by tax changes retain a much smaller economic and fiscal footprint in the UK.

Keywords: taxation; migration; super-rich; capital income; inequality; mobility (search for similar items in EconPapers)
JEL-codes: F22 H24 H31 J61 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_11870

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