This blog has been written by Rahul Sharma, Partner, at Fasken Martineau DuMoulin LLP, Toronto

Last week, I had the pleasure and privilege of being a panelist at the American Bar Association’s International Law Section conference in London, UK.  The focus of our discussion was millionaire migration.  Together with my co-panelists from different global jurisdictions, we discussed, most particularly, our observations of where high and ultra-high net worth people are moving today, and why.

For me, and from a Canadian perspective, three broad points stand out from the discussion:

1. Canada’s Projected Net Flow of Millionaires is Positive in 2024– According to Henley and Partners, Canada’s net flow of millionaires will see the country adding 3,200 to its count in 2024.  This makes Canada the fourth most popular global destination for millionaire migrants in 2024, behind the United Arab Emirates, the United States and Singapore.  While this figure contradicts the pervasive feeling amongst wealth planners today that higher net-worth people are leaving Canada, there is likely more to the story.  It is not clear how wealthy those who are leaving the country are in comparison to those who are coming in.  It is also not clear how long new millionaire migrants to Canada will remain in the country.  Although perhaps not millionaires themselves (at least not yet), the data does not reveal how many young entrepreneurs and innovators, or how many children of wealthy Canadians, including high and ultra-high net worth Canadian business owners, are leaving the country.
2. Tax is One Consideration Amongst Many— As times and generations change, priorities also seem to be shifting for many clients.  The world is complicated today in a way that it was not before.  Wealthy clients are dealing with a myriad of issues; tax seems to be but one of them but may not be a leading consideration for many.  This does not mean that today’s high and ultra-high net worth individuals and families are closed to the idea of minimising their tax liabilities.  But it does mean that increasingly, particularly when it comes to migration decisions, we are seeing clients balancing tax against other criteria, such as family, education, safety, availability of help and support, cost of living, climate, community, entrepreneurial opportunities, lifestyle, industry and innovation.  When presented with several options, clients (particularly younger clients) may not be picking the option that is most tax-efficient, but they are opting for what works best for them.  What has not changed is the advisor’s job: to understand the client’s circumstances, to navigate issues and present options, and for the client to decide what they want.
3. Where to Go? — Recent changes to beneficial foreign tax programmes and regimes, such as in the United Kingdom and Portugal, have served as reminders that legal measures can change in a world of changing–and challenging–politics.  Special programmes may be particularly susceptible to change, with the doubling of the flat rate for the Italian forfait regime serving as an example.  In a recent discussion with a global advisor, I asked where his clients were going.  He responded, “Italy, mainly, since it’s not an island off somewhere in the ocean and the regime is good, even at €200,000.”   When further asked what would happen if the regime ended in Italy, there was the predictable hunching of shoulders, shaking of head and, “well, then we need to find another place.”  Nomadism may be great when you are younger, but an increasing number of clients are not sure of where to go when it comes to favourable tax regimes and may not be looking to any of those places.  Interestingly, according to Henley and Partners, more millionaires are coming to Canada than going to Italy.

There are no hard and fast rules when it comes to client decisions on mobility and migration.  But as I have previously emphasised in my blog posts, wherever individuals go–whether they are leaving Canada, leaving assets behind in Canada, or coming to Canada with assets in another jurisdiction–they should revisit and reconsider their global estate planning prior to making relocation decisions.  The assistance of advisors experienced in this area of law, often in multiple jurisdictions, is essential.