Autumn Budget 2025: What the New Tax Rises Mean for UK Founders — And Why More Are Exploring the Dubai Shift

Is This You?

You’ve built a successful business. You extract dividends, you’re planning an eventual exit, and you expect your children to inherit the company one day. You’ve worked hard to create multi-generation security — but with every new UK Budget, it feels like the rules keep shifting against you.

If so, the Autumn Budget 2025 may be the most significant financial turning point you’ve faced.

The Budget didn’t just raise taxes — it fundamentally changed how founders can extract profits, protect family wealth, and plan succession. Dividend taxes are rising, 100% Business Relief is ending, and even the once-favourable Employee Ownership Trust exit route has been diluted.

Meanwhile, as the UK increases its tax pressure, more founders are exploring the Dubai Shift: a compliant, zero-tax environment offering long-term stability and multi-generation wealth protection.

60-Second Quick Highlights:

Here’s the entire Budget impact on family businesses in under a minute:

• Dividend tax rises 2% from April 2026 for basic and higher-rate taxpayers.
  
• Additional-rate dividend tax stays at 39.35%, meaning salary may now be more efficient.
  
• Unlimited Inheritance Tax Business Relief ends 5 April 2026.
  
• A new £1 million per-person allowance applies from April 2026, transferable between spouses.
  
• Business value above allowances faces 20% IHT (half the usual 40%).
  
• Employee Ownership Trusts lose their 100% CGT exemption — now only 50% of gains are tax-free.
  
• The UAE remains a 0% personal tax, 0% CGT, 0% IHT jurisdiction for entrepreneurs seeking long-term wealth preservation.
  
• Early planning (before April 2026) is essential for tax efficiency, succession, and exit strategies.
  

The Autumn Budget 2025: A Turning Point for UK Entrepreneurs

The new rules impact how founders:

• extract profits
• plan exits
• pass on shares
• structure long-term wealth

As UK taxes rise, Dubai’s zero-tax, founder-friendly regime increasingly becomes part of strategic planning.

Let’s break down what actually changed — and what this means for your next move.

Dividend Tax Increase (April 2026) — What Founders Need to Know

A 2% rise may appear small, but for founders extracting six- or seven-figure dividends, the compounding effect is significant.

Who Is Hit the Hardest?

• Founders relying on dividends instead of salary
• Owners with property or savings income

⏳ Action Window: Before 5 April 2026

An opportunity remains to extract profits at current lower rates.

Why Dividends Still Matter

Even after the rise, dividends remain more tax-efficient than salary for basic- and higher-rate taxpayers — though the gap narrows.

Top-Rate Founders

39.35% dividend tax remains unchanged — meaning bonuses or salary may now outperform dividends.

Inheritance Tax Changes — The End of 100% Business Relief

From April 2026, founders lose unlimited Business Relief.

New Business Relief Allowance

• £1m per founder
• Anything above taxed at 20% IHT

This introduces real tax exposure for business owners.

Couples Can Combine to £2m

But only if share ownership is structured correctly.

⚠️ If one spouse holds all shares, the second allowance may be wasted.

Restructuring before April 2026 is essential.

EOT Exits Lose Their Primary Tax Benefit

The days of 0% CGT EOT exits are over.

Old Rule: 100% CGT exemption

New Rule: Only 50% exempt

The remaining 50%:

• ❌ cannot use BADR
• ❌ cannot use Investors’ Relief
• 💸 is fully taxable

Holdover Relief?

Possible — but trustees face CGT on future sales, which creates liquidity concerns.

Founder Impact

Many are now reconsidering:

• MBOs
• third-party exits
• succession restructuring
• international planning

Why More UK Founders Are Exploring Dubai

Every new UK tax rule increases founder tax leakage.

Dubai offers:

• 0% income tax
• 0% dividend tax
• 0% CGT
• 0% inheritance tax (with DIFC Foundations)
• strong asset protection
• re-domiciliation options
• founder-friendly corporate ecosystems

📌 For many founders, Dubai is becoming part of long-term planning rather than an expat lifestyle choice.

The Dubai Shift Framework — How Founders Restructure Strategically

1️⃣ Statutory Residence Test (SRT) Planning

Reduce UK tax exposure without triggering anti-avoidance rules.

---

2️⃣ Secure UAE Residency

Via Golden Visa, business setup, employment, or property.
🎯 Forms the foundation for 0% personal tax.

3️⃣ Corporate Structuring

Options based on founder goals:

• UAE Free Zone company
• UAE holding company
• re-domiciliation of UK entity
• IP migration

4️⃣ Banking & Capital Flow

Establish compliant profit extraction channels:

• UAE private banking
• international payment routes
• structures avoiding unintended UK tax

5️⃣ Legacy & Wealth Protection

Using:

• DIFC Foundations
• holding vehicles
• multi-generation planning

This replaces restrictive UK IHT rules with a 0% tax inheritance framework.

Case Study — £2.3M in Future Tax Exposure Eliminated

The Founder

• £6m manufacturing business
• Age 58
• Children to inherit

UK IHT Exposure Under New Rules

• £4m taxable × 20% = £800,000
• PLUS £1.5m+ long-term exposure

Dubai Shift Outcome

• Founder becomes UAE-resident
• Shares transferred into a UAE foundation
• Succession governed under 0% inheritance tax

💰 Total Tax Eliminated: £2.3

Who This Strategy Is Ideal For

• founders relying on dividends
• HNWI entrepreneurs with multi-gen businesses
• business owners planning an exit
• companies valued £2m–£100m+
• families facing rising IHT exposure

Final Word from Haseena

The Autumn Budget 2025 increases the cost of running, exiting, and passing on a UK business. But with early planning and the right structure, founders can still protect — and significantly grow — their long-term wealth.

Dubai remains one of the world’s most compliant and strategically advantageous zero-tax jurisdictions.
If you’re considering a restructure or relocation, now is the time — before the April 2026 rules take hold.

Next Steps for Founders

Take the Wealth Reclaimed Scorecard: Discover how much tax you could legally reclaim or eliminate.

Book a 10-Minute Strategic Call: Get personalised guidance on relocation, succession, and structuring.

Dubai Shift‘s The Autumn Budget Series: Protecting UK Business & Family Wealth — Act Before April 2026. The Autumn Budget has rewritten the rules on dividends, IHT, succession, and exits.
But while the UK tightens its tax regime, the UAE remains a 0% tax, compliant, founder-friendly jurisdiction for long-term wealth preservation. If you’re a founder, director or family business owner, the window for strategic planning closes April 2026.