The beautiful European city suddenly flooded by British millionaires

It attracts shopaholics, visitors of Lake Como, Aperol Spritz lovers, and rich taxpayers. Just ahead of the end of the UK tax year on April 5, the city of Milan has seen an influx of new British residents. Italy's welcoming tax regime has attracted the wealthy into its financial hub and giving it a buzz.

Milan's revival traces back to 2016, when tax incentives introduced by then-Prime Minister Matteo Renzi's centre-left government aimed to stem Italy's brain drain and attract wealthy foreign residents. Following the UK's decision to abolish rules for non-domiciled residents and exposing their overseas assets to a 40% inheritance tax, the shift has intensified.

Lydia Forte, group director of food and beverage at Rocco Forte Hotels, told the Financial Times: "A few years ago the only people that lived in Milan had known each other since they were children, it was very local. Now, there are a lot of people moving there who have no connections to Italy."

In Italy, new foreign residents - as well as Italians returning after at least nine years abroad - can opt to pay a fixed annual tax of €200,000 a year on overseas income and assets for up to 15 years, while also avoiding inheritance tax on foreign assets during that time.

In theory, this saves UK millionaires hundreds of thousands - even millions - in tax. Figures from the Ministry of Economy reveal that the expat scheme application numbers have surged exponentially from under 10,000 in 2017 to nearly 40,000 in 2023.

High-profile figures leaving London for Milan include billionaire Nassef Sawiris, Goldman Sachs vice-chair Richard Gnodde, and Zaoui & Co co-founder Yoël Zaoui, while CVC's Rolly van Rappard is considering the move and Frédéric Arnault now splits his time between Paris and Milan.

"The big market is people who are 45-70 years old," said Gary Landesberg, co-founder of The Wilde, a London-style members' clubs that have opened in Milan in recent years, adding that "you're not just talking about billionaires".

The UK has also raised tax on private equity managers' profits from successful deals from 28% to 34%. In Italy, the flat rate is 26%, attracting private equity professionals and venture capitalists to the city.

Citing the quality of life as a key attraction to Milan, one private equity executive who made the move told the Financial Times that he would not have relocated to Dubai, despite its lack of personal income tax, and added that he would not have gone if the same offer had been made in Frankfurt.

However, some Italian residents have complained the Brits have made their city less authentic and "a bit over the top". Additionally, the establishment of new members' clubs such as Soho House was described as "not really the Italian way of doing things".

Property prices have also been pushed up by people accustomed to Kensington, Notting Hill and Mayfair prices - leaving Milan's historic centre occupied by bankers from London.

Yet still, The Telegraph has reported rental rates are much lower than London, with the most luxurious apartments renting for approximately €10,000 a month. This equals to a weekly cost in London.