INTRODUCTION Contributed by: Basil Zirinis, Elizabeth Kubanik and Megan Eitel, Sullivan & Cromwell LLP
Global conflicts Russia’s military invasion of Ukraine in February 2022 has caused many thousands of deaths and displaced millions of people. The ongoing conflict continues to have a resounding international impact. In response to the crisis, the European Union, the USA and other countries have imposed economic sanctions against Russia, with broad international economic ripple effects. These sanctions have had a significant impact on private client advisers, who must keep abreast of changing guidance in relation to clients with ties to Russia. Individual violators of sanctions are generally subject to strict liability and face stiff penalties. Long-standing tensions in the Middle East boiled over in October 2023, when Hamas launched an attack on Israel. The ongoing conflict has since escalated into one of the most significant in the region in decades, causing tens of thousands of deaths and displacing millions of people. The conflict has expanded beyond Gaza, including periods of conflict in Lebanon and Iran. Recent military action involving the USA and Iran has further heightened geopolitical uncertainty in the Mid - dle East. The resulting disruption to international ship - ping and energy markets serves as a reminder of the wider economic implications that geopolitical events can have for internationally connected clients. Private client advisers will need to continue to monitor the political and economic environment surrounding the conflict and the effect on clients’ patterns of global migration as a result. Elections and political risk The political changes brought about by the landmark elections of 2024 have continued to unfold through 2025 and into 2026. In the United Kingdom, the Labour Party defeated the Conservative Party in the July 2024 general election, and in 2025 sweeping tax changes were made, particularly with respect to the “non-dom” tax regime. In the USA, President Donald Trump returned to office for a second term and has since introduced an economic agenda focused on tax
work in the country in exchange for USD1 million. However, as of 1 April 2026, only one applicant had been approved, and the constitutionality of the pro - gramme is being challenged in pending litigation. Presumably, these programmes will continue to be an area of focus in cross-border client practice. Preferential tax regimes that appeal to high net worth clients, and changes to such regimes, have also con - tinued to impact global immigration patterns. Under Italy’s “flat tax” regime, high net worth individuals are taxed at a fixed annual amount, which increased from EUR100,000 to EUR200,000 per year in 2024, and then to EUR300,000 per year from 2026. Greece has implemented a similar “flat tax” regime, under which foreign-source income is taxed at a flat annual rate of EUR100,000, subject to certain investment require - ments. Switzerland’s lump-sum tax regime is avail - able to foreigners who live but do not work in Swit - zerland (although the lump-sum taxation system is not available in all cantons). Unlike the Italian and Greek regimes, Switzerland calculates a taxpayer’s tax base from the taxpayer’s lifestyle expenses. Spain’s “Beckham” regime provides preferential tax treatment to foreigners who acquire tax residence in Spain for work purposes. Portugal’s expatriate tax regime – the “Non-Habitual Resident” (NHR) tax regime – ended in 2023 and has been replaced by the somewhat more restrictive “Tax Incentive for Scientific Research and Innovation” (IFICI), which provides for a flat tax rate of 20% on eligible income from Portu - gal and exemptions on professional foreign-sourced income. Furthermore, in April 2025, the United King - dom abolished its long-standing “non-dom” tax regime and replaced it with the Foreign Income and Gains (FIG) regime. The USA has proposed a “Plati - num Card”, which, if implemented, would create a preferential tax regime for qualifying ultra-high net worth individuals by permitting up to 270 days of presence in the USA without US taxation of non-US income, in exchange for a USD5 million contribution. All of these regimes are much more complex than they appear at first, and comprehensive tax planning with local experts is vital.
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