Wealthy proprietors of Hauser & Wirth move to Switzerland, fleeing UK's wealth tax laws
In recent times, several high-profile figures in the art industry are leaving the UK due to new tax reforms targeting the ultra-wealthy. These changes, which reshape the inheritance tax landscape, are creating financial pressures on collectors, artists, and estates.
### UK's Shift in Inheritance Tax Regime
As of April 6, 2025, the UK transitioned from a domicile-based to a residence-based inheritance tax (IHT) regime. This move means that individuals who have been UK residents for at least 10 of the last 20 years are now taxed on their global assets, not just UK assets. This change, coupled with the capping of Business Property Relief (BPR) and Agricultural Property Relief (APR) from April 2026, forces artist estates and collectors to consider selling key works or business assets to cover tax bills[1].
### Controversies and Sector Impact
These tax reforms have sparked significant controversy within the UK art world, with concerns that they could lead to forced sales of culturally important works and studios and prompt wealthy figures in the creative sectors to relocate abroad to avoid heavy taxation[1]. This trend comes amid broader government austerity measures that include cuts to culture department funding and resources, which many stakeholders see as a self-imposed injury to the creative economy.
### Iwan and Manuela Wirth's Relocation
Amidst these reports, Iwan and Manuela Wirth, renowned figures in the art industry, have moved their permanent residency from the United Kingdom to Switzerland. The Wirths, who run the development and hospitality company, Artfarm, are not abandoning their UK presence. Instead, they are working on projects in Switzerland, the US, and the UK, as confirmed by the gallery to the Financial Times.
The Wirths' gallery holding company is located in Switzerland, and they have registered their relocation in documents related to their businesses filed with Companies House this month. A new London location for Hauser & Wirth gallery, the gallery run by the Wirths, is planned to open in 2026.
### The Broader Picture
While the UK government has framed the reforms as closing loopholes and ensuring fairness, the creative industries argue for a reset in policy that better balances tax enforcement with support for artists and collectors. By contrast, other countries like Australia are exploring tax reforms aimed at boosting the creative economy, indicating a competitive international environment for attracting high-net-worth individuals and cultural investment[2].
A study by the London School of Economics in 2024 challenged claims of a significant "wealth exodus" in the UK[3]. Despite the Wirths' relocation, post-tax profits for the UK location of Hauser & Wirth rose slightly from £5.2 million to £6 million during that period. In 2023, the gallery's UK location reported turnover of £144 million, a 13 percent decrease from the £166 million made in 2022.
In conclusion, the relocation of Iwan and Manuela Wirth comes as some high-profile figures in the art industry depart the UK following tax reforms. However, it's essential to note that the Wirths are not abandoning their UK presence and are still actively involved in projects across the UK, Switzerland, and the US. The broader picture suggests that the UK government's tax reforms are causing concerns within the creative industries, with many worried about the UK's ability to retain creative talent and preserve cultural heritage amid growing tax burdens and financial uncertainty.
[1] https://www.theartnewspaper.com/news/uk-inheritance-tax-changes-pose-threat-to-art-market-and-cultural-heritage [2] https://www.theguardian.com/artanddesign/2023/jan/01/art-world-tax-reforms-uk-australia [3] https://www.lse.ac.uk/news-and-events/news-articles/2024/04/wealth-exodus-myth-uk-tax-reforms-economy-study
- The Wirths' gallery holding company, located in Switzerland, might lead to more installations and art pieces being financed and managed from a different business base, as they continue to expand their operations beyond the UK in the domains of art, business, and wealth management.
- The gallery run by Iwan and Manuela Wirth, Hauser & Wirth, plans to open a new location in London in 2026, despite their relocation, demonstrating their ongoing commitment to the UK art industry during this period of significant change in the tax landscape.
- The financial pressures on collectors, artists, and estates due to the new tax reforms in the UK could potentially influence the art market and encourage more transactions in the finance sector for the strategic management of assets and estates, especially as high-net-worth figures consider their options for wealth preservation.
