The firm's "Global Lifestyle Review" 2016 looks at the lifestyle available in 26 “favourable tax locations” for people at three stages of life. Hong Kong is named the best place to live for an entrepreneur; Luxembourg tops the list for a family, and Sydney is the number one location for a retired couple.

The report was produced with accountancy group BDO. It examines factors including but not limited to personal safety, political risk, quality of life, education, cost of healthcare and available leisure pursuits. Knight Frank weighted these lifestyle elements and identified the top 10 places to live for an entrepreneur, family and retired couple. 

For entrepreneurs, Hong Kong is followed by London, Vancouver and Dubai. For families, Luxembourg is followed by Vienna and Hong Kong. For retirees, Sydney is followed by Malta and Luxembourg.

While Hong Kong, Luxembourg and Sydney top the rankings, locations such as Dubai, Geneva and London still make the top 10 list for both an entrepreneur and a family. Monaco is also amongst the top 10 winners, offering an excellent quality of life for entrepreneurs and retired couples, the report said. 

“When choosing a destination to live, individuals often want to balance the lifestyle and economic factors, ensuring that their financial affairs and global assets are structured in an efficient manner. Objectives mainly focus on ensuring long-term asset preservation whilst complying with their global tax obligations,” said Richard Montague, tax partner at BDO.

“An understanding of the tax regime in the country of choice is key. Most countries have some form of indirect taxation, such as Value Added Tax (VAT) or property transfer taxes, and will also apply direct tax on income and profits on the disposal of assets. Other countries will seek to tax capital gifted or inherited, or apply an annual tax on net wealth. Some countries even seek to apply an exit tax when individuals break tax residence. There are many pitfalls for the unwary,” he said.

The study examined, for example, jurisdictions with low and no tax (under 20 per cent), such as countries with a headline rate of tax on income and capital gains of 20 per cent or less. These include the British Virgin Islands, Hong Kong, Monaco,Luxembourg, Russia, Singapore, the Bahamas, Channel Islands and United Arab Emirates. For those offering a regime whereby foreigners can pay tax on foreign income or capital gains in accordance with the amount remitted to that country, the countries examined are Ireland, Malta and the UK. Countries offering a lump sum tax regime are Gibraltar and Switzerland. Jurisdictions offering a favourable tax break for new residents in the study include Australia, Austria, Brazil, Canada, Cyprus, Denmark, Miami, New Zealand and Portugal.

Factors such as Mercer’s Personal Safety Ranking, distance to a major airport, number of Michelin starred restaurants, cost of a premium bottle of champagne in a 5-star hotel and available leisure pursuits were considered when analysing what motivates entrepreneurs to live in a certain location. 

Lifestyle factors including the number of international schools within a 10km radius, Mercer’s Personal Safety Ranking, available leisure pursuits, cost of annual healthcare and hours of sunshine were considered when analysing what motivates families to live in a certain location.

Lifestyle factors including the cost of annual healthcare, Mercer’s Quality of Life Ranking, hours of sunshine, cost of a cappuccino and distance to a major airport were considered when analysing what motivates a retired couple to live in a certain location.