As the UK’s non-dom regime comes to an end, Milan has seen an influx of wealthy individuals seeking refuge under Italy’s generous flat-tax system. However, the recent opening of a new divorce law firm in the city’s financial district suggests that not all of these new residents are entirely satisfied with their decision.
The abolition of the non-dom status in the UK last year has prompted a significant number of high-net-worth individuals to explore alternative options, with many turning to Milan as a potential haven. The Italian city’s flat-tax regime, which allows foreign residents to pay a fixed annual fee of €100,000 regardless of their worldwide income, has proven particularly attractive to this demographic.
Yet, the arrival of a new divorce-focused law firm in Milan’s prestigious Porta Nuova district has raised eyebrows among industry observers. The firm, which specialises in cross-border family law, is expected to cater to the growing number of non-doms who are now seeking to untie the marital knot.
“There’s no doubt that Milan has become a popular destination for non-doms looking to take advantage of the favourable tax regime,” says Francesca Rossi, a senior associate at the new law firm. “However, it appears that some of these individuals are now facing personal challenges that they didn’t anticipate when making the move.”
Data from the Italian tax authority shows that the number of foreigners taking advantage of the flat-tax scheme has more than doubled since its introduction in 2017, with the majority hailing from the UK. While the exact number of non-doms in Milan is difficult to ascertain, industry estimates suggest that the city is now home to several thousand of these high-net-worth individuals.
“The decision to relocate to Italy is not one that should be taken lightly,” cautions Rossi. “The tax benefits are undoubtedly attractive, but there are also significant personal and legal implications that need to be carefully considered, particularly when it comes to matters such as divorce and family law.”
As the non-dom exodus from the UK continues, the opening of this new divorce-focused law firm in Milan serves as a stark reminder that the allure of a favourable tax regime may not always be enough to overcome the complexities and challenges of a cross-border lifestyle.
