Tax-Free Countries: Rising wealth and exit taxes in Britain are driving billionaires like Lakshmi Mittal to Dubai and other countries. Learn how tax-free countries manage their expenses despite not charging income taxes, and the risks of living there.
Tax-Free Countries: Indian-born British billionaire Lakshmi Mittal is leaving Britain. According to media reports, Lakshmi Mittal, owner of ArcelorMittal, the world’s second-largest steel company , is now planning to settle in Dubai or Switzerland. The Sunday Times reports that the new Labour Party government is preparing to increase taxes on the wealthy.
Mittal has decided to leave Britain because of this proposed wealth tax. This tax is to be imposed on the “super rich.” Its purpose is to boost Britain’s declining economy. Mittal, an Indian-American, has a net worth of approximately ₹1.8 lakh crore (approximately $1.8 trillion). He is considered the eighth-richest person in Britain. According to reports, many other British tycoons may also move to countries with lower taxes.
Many countries don’t impose any personal income tax, particularly in the Middle East, such as the UAE and Qatar. This means that residents can keep their entire salary. This makes these countries known as “tax-free” and attractive to professionals from around the world. Let’s explore why wealthy British businesspeople are leaving, and how low-tax countries manage their expenses.
Preparations to impose ‘exit tax’
Britain’s Labour government is now preparing to impose an exit tax of up to 20%. New Finance Minister Rachel Reeves aims to raise approximately 20 billion pounds (about ₹2.3 lakh crore) to revive the country’s weakened economy.
His first budget is scheduled for November 26th, and it is expected to announce an exit tax on high-net-worth individuals. Previously, the government also made significant changes to the capital gains tax, raising it from 10% to 14% effective April 2025. It is planned to increase it to 18% in 2026.
The biggest concern is inheritance tax.
According to an advisor associated with Lakshmi Mittal’s family, inheritance tax is a major concern for wealthy investors. He says that most foreign wealthy individuals cannot understand why Britain imposes inheritance taxes of up to 40% on their worldwide assets. This is forcing many wealthy families to leave Britain.
Inheritance tax in the UK is up to 40%, while in countries like Dubai it is zero. In April of this year, the government also abolished Non-Dom (Non-Domiciled) status, a nearly 200-year-old system that required wealthy individuals to pay tax only on their earnings in the UK. This change has accelerated the decision by many high-net-worth individuals to leave the UK.
Many wealthy businessmen are leaving Britain
Mittal’s move comes at a time when many major industrialists and investors are rapidly leaving the UK, largely due to a lack of stability in its policies and the possibility of future tax increases, which has increased insecurity among high-net-worth individuals.
According to the report, Revolut co-founder Nik Storonsky has already relocated to the UAE to avoid paying hefty capital gains taxes. Meanwhile, Indian-born Herman Narula is also leaving the UK for Dubai. He had lived in the UK since the age of two. Narula is the founder of the AI company Improbable AI.
expenditure on natural resources
Many Gulf countries, including the UAE, rely heavily on their oil and gas reserves to fuel their economies. The substantial revenue generated by exporting these resources is used by governments to build infrastructure, provide subsidies, and fund their expenses. Therefore, there is no need to collect income taxes from their citizens.
Tax-free, but not completely
However, these countries are not completely tax-free. They generate revenue indirectly through Value Added Tax (VAT), corporate taxes, and excise duties. This means that companies and goods are taxed, but not individuals’ salaries.
This model has made these countries highly attractive to foreign investors and professionals. Low taxes have also led to rapid growth in the real estate, tourism, and service sectors.
There are no taxes in Dubai, but the expenses are very high.
Cities like Dubai and Abu Dhabi in the UAE are known for their tax-free income and business-friendly environment, but living here is extremely expensive. Chartered Accountant Nitin Kaushik wrote on X that the rent of a 1BHK flat in Dubai is ₹1.5 to ₹3 lakh per month. Whereas, the same house can be bought in India for ₹40,000 to ₹70,000. Milk costs ₹120 per litre, metro pass ₹8,500 per month. In Mumbai, your work can be done for ₹350. This means that the benefit of tax savings is lost in an expensive lifestyle.
Job security is a major challenge
Kaushik explained that in Dubai, losing a job means losing a visa. If someone is fired, they have only 30 to 60 days to find a new job or leave the country. Many companies lay off entire teams without notice, and there are no legal protections like in India. He said, “When layoffs happen, entire departments are dismissed in one fell swoop, without any severance or legal protection.”
Tax-free for the rich, tough for the poor
This tax-free system is undoubtedly beneficial for the rich, but the poor pay taxes in the form of lower salaries. One user on Reddit wrote, “There are no taxes in the UAE, but the poor pay them through lower salaries.” Workers there earn very low wages, while working hours are long and overtime is not paid. Many sectors operate six days a week, and work-life balance is negligible.
The ‘Dubai Dream’ is not for everyone
Nitin Kaushik says that while there’s nothing wrong with living in Dubai, it’s not for everyone. If someone has good skills, a strong network, and some savings, they can offer excellent career and growth opportunities there. He says, “Don’t just chase the ‘Dubai Dream.’ Understand the risks, prepare, and then take action.”
Same situation in other tax-free countries too
Many countries, such as Monaco, Bermuda, and the Bahamas, also have no income tax, but they are among the most expensive countries in the world. Real estate prices in Monaco are so high that it’s nearly impossible for ordinary people to afford living there.
Overall, tax-free countries aren’t as attractive as they appear from the outside. While tax savings are certainly possible, the costs increase exponentially. Therefore, if you’re considering settling in a tax haven, first assess your expenses, job security, and your skills. Otherwise, you might end up paying a “lifestyle tax” while trying to save tax.
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