Aberdeen Asset Management is considering abandoning the UK as its headquarters for tax purposes as speculation mounts that a wave of British fund managers could head for the exit in frustration at Treasury tax changes.

Aberdeen has been based in the Granite City since 1987, when it was formed out of a $50 million investment trust in a management buyout led by Martin Gilbert, the chief executive.

Losing the company, which yesterday boosted its funds under management to £114 billion through the acquisition of a property business, would be a big blow to the Treasury.

The list of companies that are threatening to leave the UK because of its unfavourable tax levies has increased almost by the day in recent weeks.

The Government announced proposals last summer to simplify UK companies’ payment of tax on overseas earnings. But an increasing number of corporates believe that the changes could see their tax burden jump significantly unless they change their country of incorporation.

Aberdeen manages UK funds mainly on behalf of British institutions, including pension funds and local authorities. The company derives a large proportion of its earnings from managing funds overseas.

The Times revealed yesterday that Brit Insurance, a Lloyd’s of London underwriter, was among several insurance companies that might opt for lower-tax regimes including Dublin and Geneva.

It follows confirmation from Shire Pharmaceutical, the UK’s third-largest pharmaceutical company, that it is moving its tax domicile to Ireland.

Shire will keep its group operations headquarters in the UK but its holding company will be incorporated in Jersey, and pay reduced tax on global earnings in Ireland, where the headline corporate rate is just 12.5 per cent.

United Business Media, the publishing group, is also considering moving its tax domicile from the UK to Ireland. Sir Martin Sorrell, chief executive of WPP Group, the world’s second-largest advertising group, said his company was considering moving its tax domicile overseas.

David Illingworth, chief executive of Smith & Nephew, the FTSE 250 medical equipment maker, said his company was also keeping its tax domicile “under review” and refused to rule out a move abroad.

Ken Hanna, finance director of Cadbury, said last night that although it would be difficult for a company such as his to leave Britain, it was still “something we are watching very closely”.

Speculation was mounting that other fund managers could follow Aberdeen. One senior UK executive at one of Britain’s largest fund managers said: “We are looking once again at our position. If what we are reading about is going to happen then fund managers are an obvious target for relocating [overseas]. Fund managers make significant profits overseas. This [move] won’t affect our employment position in the UK, but it would affect the Treasury’s tax receipts.”

Aberdeen declined to comment.

The Treasury said that it was consulting businesses to work through the details of the proposals. “There has been a lot of over-reaction; the fears are really overcooked. We don’t agree that there has been an erosion in the competitiveness of our tax system . . . but we can never compete with tax havens like Ireland.”

Aberdeen yesterday paid £89 million to buy back an enlarged version of a UK property fund management business it sold for £50 million four years ago.