Milan: the neighbour as competitor

Milan after Brexit

For most of the post-war period Milan was the place from which Lugano's clients came. Lugano, in turn, received a large part of the savings that left Milan. Chapter H.I has described Milan as Italy's financial capital, the seat of Borsa Italiana under Euronext ownership since 2021 and of the clearing house that now serves the whole Euronext group. The departure of the United Kingdom from the European Union gave the Lombard capital additional functions. The Unified Patent Court received a section of its central division in Milan, and Euronext concentrated its clearing in the former Cassa di Compensazione e Garanzia. Some international banks and asset managers moved staff or legal entities from London to Milan, although on a smaller scale than to Paris, Frankfurt, Dublin or Amsterdam.¹ The development that changed the competitive relationship with Lugano was the arrival of wealthy individuals and their families in Milan.

Henley & Partners, a firm that advises on residence and citizenship programmes, estimated in June 2025 that Italy would record a net inflow of 3,600 millionaires in that year, more than Switzerland with 3,000 and behind only the United Arab Emirates and the United States. The same report forecast a net outflow of 16,500 millionaires from the United Kingdom and observed that many high-earning executives leaving London were settling in Milan.² These estimates rest on a proprietary method that combines data on the residence of wealthy individuals from commercial sources and are not official statistics. Since their methodology has been criticized by researchers, among them the Migration Observatory at the University of Oxford, which called the figures unreliable, they should be read as indications of direction.³ The direction, however, is consistent with the official Italian data on the use of the tax regimes for new residents.

The flat tax for new residents in practice

The instrument that drew wealthy individuals to Milan is the regime for new residents in Art. 24-bis of the Consolidated Income Tax Act (Testo unico delle imposte sui redditi, TUIR), introduced by the Budget Act for 2017 and examined in detail in Chapter E.V. An individual who has not been resident in Italy for at least nine of the ten tax periods before the transfer may pay a fixed substitute tax on all foreign-source income for at most fifteen years. The amount was EUR 100,000 a year until 9 August 2024, EUR 200,000 for transfers from 10 August 2024 to 31 December 2025 and EUR 300,000 for options exercised from 1 January 2026. The amount for each family member rose from EUR 25,000 to EUR 50,000. Persons who exercised the option earlier keep the amount applicable at the time. The regime exempts its beneficiaries from the reporting obligations for foreign assets in section RW of the tax return, from the Italian taxes on foreign real estate (IVIE) and foreign financial assets (IVAFE) and from inheritance and gift tax on assets situated abroad.⁴

Data of the Italian Department of Finance from the income tax returns for 2024, published in April 2026, show 1,631 users of the regime including family members, about 400 more than a year earlier, and only 27 revocations. The same returns show more than 44,800 beneficiaries of the regime for impatriate workers, with an average income of EUR 120,900, and 933 foreign pensioners under the 7 per cent substitute tax for pensioners who move to small municipalities in southern Italy. The press attributed the growth of the flat tax in part to the abolition of the British non-domiciled regime in 2025 and to political instability in the Middle East, which had affected centres such as Dubai.⁵ The United Kingdom abolished the remittance basis of taxation with effect from 6 April 2025 and replaced it with a four-year regime for foreign income and gains and a residence-based inheritance tax that applies after ten years of residence within twenty.⁶ For wealthy foreigners who had lived in London under the old regime, Milan offered a European city with a fixed annual tax, a familiar professional environment and no inheritance tax on foreign assets.

In figures. Italy's flat tax for new residents rose from EUR 100,000 (2017) to EUR 200,000 (transfers from 10 August 2024) and EUR 300,000 (options from 1 January 2026).⁷ The tax returns for 2024 show 1,631 users including family members, 27 revocations, more than 44,800 impatriate workers and 933 foreign pensioners under the 7 per cent regime.⁸ Italian private banking assets reached a record of EUR 1,417 billion at the end of 2025.⁹

Notes

1. See Chapter H.I with sources. The small scale of relocations to Milan compared with Paris, Frankfurt, Dublin and Amsterdam is taken from the Brexit trackers of EY. ↩
2. Henley & Partners, "Henley Private Wealth Migration Report 2025" (press release, 24 June 2025), https://www.henleyglobal.com/newsroom/press-releases/henley-private-wealth-migration-report-2025. ↩
3. Henley & Partners (above), stating that the report is compiled with the wealth intelligence firm New World Wealth. On the criticism, including the statement of Madeleine Sumption of the Migration Observatory at the University of Oxford that the figures were not reliable, the absence of official tax or travel data and the small staff of New World Wealth, see Wikipedia, "Henley & Partners", https://en.wikipedia.org/wiki/Henley_%26_Partners (consulted October 2026; used as a last resort). ↩
4. Redazione deQuo, "Flat tax neo-residenti", 21 May 2026, https://www.dequo.it/articoli/flat-tax-neo-residenti, which cites Legge 11 dicembre 2016, n. 232 (Art. 1(152)) and Legge 30 dicembre 2025, n. 199 (Budget Act for 2026) and confirms the exemptions from section RW, IVIE, IVAFE and inheritance and gift tax on foreign assets. The increase for transfers from 10 August 2024 rests on Decreto-legge 9 agosto 2024, n. 113, Art. 2-bis, as cited in Chapter E.V. ↩
5. "In Italia ci sono sempre di più super ricchi: adesioni su del 25% per la flat tax da paperoni", Milano Finanza, 25 April 2026, https://www.milanofinanza.it/news/in-italia-ci-sono-sempre-di-piu-super-ricchi-adesioni-su-del-25-per-la-flat-tax-da-paperoni-202604251306253318. The 7 per cent regime for pensioners is in Art. 24-ter TUIR, text at Brocardi.it, https://www.brocardi.it/testo-unico-imposte-redditi/titolo-i/capo-i/art24ter.html (foreign pension income, transfer of residence to municipalities of the southern regions, nine tax periods). ↩
6. HM Treasury and HM Revenue & Customs, "Changes to the taxation of non-UK domiciled individuals" (policy paper, 6 March 2024, updated 23 April 2024), https://www.gov.uk/government/publications/changes-to-the-taxation-of-non-uk-domiciled-individuals. ↩
7. deQuo (above). ↩
8. Milano Finanza (above). ↩
9. Associazione Italiana Private Banking (AIPB), press releases of 30 March 2026 ("masse record a 1.417 miliardi") and 18 June 2026, https://www.aipb.it/it/press/comunicati-stampa. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.