Exclusive: Goldman Sachs International boss joins non-dom exodus
Goldman Sachs’ most senior banker outside America is joining the growing ranks of wealthy foreigners leaving the UK to avoid the government’s crackdown on non-doms, CityAM can reveal.
Richard Gnodde, the investment banking juggernaut’s vice chairman, is moving to Milan to avoid changes the Chancellor made to the non-dom regime and foreign-held trusts in last October’s Budget, two people familiar with the matter have said.
The South African banker’s decision to relocate puts him among a growing wave of high-profile UK residents quitting Britain in favour of more tax-friendly jurisdictions.
Last month, it emerged that multi-billionaire steel tycoon Lakshmi Mittal was planning to move the United Arab Emirates, having spent nearly 30 years as a resident in London and been a major donor Tony Blair’s Labour Party.
And Aston Villa’s billionaire co-owner Nassef Sawiris has also moved to Italy, attributing his departure to the “10 years of incompetence” by the former Conservative government, rather than recent changes made by the incumbent Labour party.
But Goldman Sachs’ Gnodde is the first example of a serving senior banker moving to work in a different country, sparking fears the exodus is spreading to some of the City’s most storied institutions.
Italy has become one of the most popular destinations for former non-doms seeking to relocate in the face of the government crackdown. Since 2017 the country has had a ‘golden visa’ regime in place that allows global investors to be tax resident for a flat fee currently levied at €200,000.
Leslie Macleod-Miller, chief executive of the non-dom lobby group, Foreign Investors for Britain, said Gnodde’s decision to move Italy proved the UK needed to adopt its own equivalent of the tax wrapper. He told CityAM: “We are calling on the government to create an internationally competitive environment that attracts and retains top global talent and investment.
“Only this will stem the flow of highly desired – and highly mobile – individuals such as Gnodde.”
In her maiden Budget, Rachel Reeves went ahead with a previously announced promise to abolish the non-domicile status, a 200-year-old tax regime that allowed wealthy foreigners to be taxed only on UK-based income and assets.
As part of the same fiscal crackdown, which came into force at the start of this month, Reeves also tightened up rules around foreign trusts.
Under the changes, non-UK trusts owned by former non-doms like Mittal and Gnodde would be treated the same as a UK citizen in the eyes of the Exchequer, and be liable for levies like inheritance tax.
It is understood that Gnodde, whose country of residency is still listed as the UK on Companies House, will continue work from Goldman’s Milan office, but his departure from London brings an end to what has been an illustrious career in the Square Mile.
He joined Goldman’s London outpost in 1987 when it had just a few dozen employees. After stints in Hong Kong, Japan and Singapore, he was appointed co-chief executive officer of Goldman Sachs International in 2006 alongside Michael ‘Woody’ Sherwood.
He took on the role on an individual basis when Sherwood retired in 2016, making him one of the City’s most powerful bankers, responsible for the finance behemoth’s footprint outside the US.
In January, the bank announced Gnodde was stepping down from that chief executive role as part of a wide-ranging leadership reshuffle that saw investment banking chief Anthony Gutman and respected dealmaker Kunal Shah appointed as his joint replacements.
And as well as retaining his vice chairman role, Gnodde now also serves on the bank’s Supervisory Board of Goldman Sachs Bank Europe.
A spokesman for Goldman Sachs said: “Given his new role, Richard will be primarily focused on growth opportunities for the firm across Europe. He will continue to spend time with our team in the London office.”