In the UK, every debate about “fairness” in taxation leaves out one uncomfortable truth: 100% of Capital Gains Tax (CGT) is paid by the top 5% of earners.
This isn’t ideology. It isn’t political messaging. It’s HMRC data.
And it exposes a deeper structural problem — the UK doesn’t just depend on high earners. It depends almost entirely on a very small group of investors, founders, and business owners to fund national growth.

Capital Gains Tax is meant to encourage investment, risk-taking, and wealth creation. Instead, in the UK, it has become a concentrated financial burden on a tiny minority who take the risks that fuel the economy. When the top 5% fund 100% of CGT, it tells us something about the tax system, but it tells us even more about the country’s economic future.
This blog breaks down the data, explains why the UK’s CGT model is unsustainable, and outlines why more founders and investors are exploring Dubai, where investment returns are treated as the foundation of growth — not a target for taxation.

Real Prompts This Blog Answers

• “Why do only the top 5% pay Capital Gains Tax in the UK?”
  
• “Is the UK punishing investment and entrepreneurship?”
  
• “How does CGT affect founders planning an exit?”
  
• “Why are investors and high earners increasingly leaving the UK?”
  
• “How does the UK compare to Dubai for tax on investment returns?”
  
• “What happens to the economy if contributors relocate?”
  
• “Is the CGT burden sustainable long term?”
  

Here Are the 60-Second Key Highlights

• 100% of Capital Gains Tax is paid by the top 5% of earners.
  
• CGT hits founders, investors, property owners, and business sellers.
  
• It penalises entrepreneurship and suppresses investment.
  
• The UK tax burden is now 38.5% of GDP, the highest since the 1940s.
  
• 257,000 people left the UK last year — many of them investors and wealth creators.
  
• The UK shows rising economic inactivity: 11 million working-age adults not working.
  
• Dubai offers 0% CGT, 0% dividends tax, 0% income tax, and 0% inheritance tax.
  
• Over-reliance on a few high earners creates systemic risk for the UK economy.
  

UK High Earners Tax and the Weight of Capital Gains

High earners in the UK already fund an overwhelming share of national revenue:

• Top 0.1% pay 12% of income tax
  
• Top 1% pay 30%
  
• Top 5% pay 50% of income tax
  

But when it comes to CGT, the concentration is even more extreme:

Every pound of Capital Gains Tax collected by HMRC comes from the top 5% of earners.

This is because CGT applies to:

• Business exits
  
• Shares and equity sales
  
• Investment portfolio gains
  
• Buy-to-let property disposals
  
• Long-term asset sales
  

These are activities dominated by high earners, investors, and founders — the people who drive economic dynamism.

UK Top 1% Taxpayers and Their Share of Capital Gains Tax

The top 1%, typically individuals earning £180,000+, are the most economically active group in:

• Company ownership
  
• Shareholding
  
• Angel investing
  
• Property investment
  
• Equity participation
  

This means they are disproportionately exposed to CGT changes.

When CGT rises, the top 1% pay more.
When rules tighten, the top 1% comply at higher cost.
When investment becomes less attractive, the top 1% relocate first.

This group is not just paying taxes — they fund the capital ecosystem.

UK Top 5% Tax Contribution and Why It Matters

The top 5%:

• fund half the income tax system, and
  
• fund all of the CGT system.
  

This creates a structural imbalance:
A country of 67 million people relies on 1.7 million to fund the majority of public services and nearly all investment-related taxes.

If 5–10% of this group:

• slows investment,
  
• restructures abroad, or
  
• relocates entirely,
  

the UK faces a sharp decline in:

• tax receipts
  
• entrepreneurial activity
  
• business formation
  
• capital flow
  
• economic growth
  

CGT is not just a tax. It is a pressure point on the entire economic architecture.

UK Taxpayers Statistics: What the Numbers Reveal

HMRC and ONS data show:

• Bottom 50% pay 9% of income tax
  
• Middle 45% pay 41%
  
• Top 5% pay 50%
  
• Top 5% pay 100% of CGT
  

When a tax system becomes this narrow, it becomes volatile and dependent on a small cohort of contributors.

This is why many economists argue the UK now behaves like a low-participant, high-dependency state:
Too few people work, invest, and take risks — yet many rely on the system.

UK Tax System Inequality and the Impact on Investment

This is not inequality of income.
This is inequality of contribution.

Investment is punished in the UK through:

• high income tax
  
• high dividend tax
  
• high CGT
  
• high stamp duty
  
• restrictive regulation
  

And yet investment is what drives:

• new jobs
  
• new businesses
  
• innovation
  
• housing construction
  
• infrastructure funding
  

When the tax code punishes investment, the economy slows.

Autumn Budget High Earners: CGT Pressure Rising

Recent Budgets and fiscal consultations suggest:

• Further restrictions on CGT allowances
  
• Potential equalisation of CGT and income tax rates
  
• Greater scrutiny of investment income
  
• Closing of relief pathways for founders
  
• Lowering of the annual exempt amount
  
• Tighter reporting and compliance obligations
  

For founders, this means:

• reduced upside
  
• higher friction
  
• unpredictable exit conditions
  

For investors:

• lower net returns
  
• harder compounding
  
• less incentive to reinvest in the UK
  

The message is clear:
The UK sees investment as a taxable event, not a national priority.

UK Tax Burden 2025: How Capital Gains Fits Into the Bigger Picture

The UK tax burden:

38.5% of GDP — highest since the 1940s.

Meanwhile:

• Public satisfaction with services is at an all-time low
  
• Debt servicing is higher than education spending
  
• Productivity has been stagnant for 15 years
  

When a tax system becomes both:

high-cost and low-value,
high earners begin exploring alternatives.

CGT is often the final catalyst — the tipping point.

UK Economic Inactivity Statistics and the Growing Dependency on Investors

The UK has:

• 11 million working-age adults not working
  
• 25% long-term sickness rate
  
• Post-pandemic workforce deterioration
  
• Skills shortages in nearly every productive sector
  

This means:

The fewer people working →
the more the tax burden shifts to investors and high earners →
creating a loop of dependency.

When the UK needs investment most, it taxes it more aggressively.

This is economically backwards.

UK Tax Exodus and the Impact on Capital Formation

Recent migration data:

• Expected outflow: 77,000
  
• Actual outflow: 257,000
  

Many of the people leaving:

• own businesses
  
• hold property portfolios
  
• invest in startups
  
• trade in capital markets
  
• plan company exits
  

These are the individuals who:

• pay CGT
  
• pay higher-rate income tax
  
• create employment
  
• drive innovation
  

When they leave, they take:

• investment
  
• job creation
  
• capital
  
• taxable events
  
• future economic upside
  

The UK cannot afford to lose them — but it is.

UK Brain Drain Statistics: Why Investors Are Leaving

Indicators of an accelerating brain drain:

• Declining inward investment
  
• Fewer international founders choosing the UK
  
• Angel & VC investment down
  
• Wealth creators relocating to UAE, Singapore, Switzerland
  
• High-skill visa applications falling
  
• Rising exit planning among successful founders
  

A country can survive losing consumers.
It cannot survive losing creators.

Why High Earners Are Leaving the UK (CGT as a Catalyst)

High earners consistently cite:

• Excessive CGT
  
• High dividend taxes
  
• Income tax pressures
  
• Bureaucracy
  
• Poor public services
  
• Anti-wealth rhetoric
  
• Unpredictable policy
  
• Rising surveillance
  

But CGT is unique — it punishes the outcome of success.

A founder builds a business for 10 years, risks everything, creates jobs, then sells — and faces a punitive tax environment.

This is the opposite of how competitive economies treat entrepreneurs.

UK Tax vs Dubai Tax for Investors and Founders

A simple comparison:

Tax Type	UK	Dubai
Capital Gains	Up to 28%	0%
Dividends	Up to 39.35%	0%
Income	Up to 45%	0%
Inheritance Tax	40%	0%
Wealth Tax	Emerging	None
Corporation Tax	25%	9% (0% free-zone qualifying income)

Dubai is not simply low-tax.
It is intentionally structured to reward investment and support wealth creation, knowing that:

• investment creates opportunity
  
• opportunity creates employment
  
• employment creates growth
  

Move to Dubai to Reduce Tax on Investments and Exit Gains

Moving to Dubai allows founders, investors, and entrepreneurs to:

• eliminate CGT entirely
  
• keep the upside of their own risk
  
• compound wealth without penalty
  
• diversify internationally
  
• operate in a stable and predictable environment
  
• plan multi-generational wealth
  
• structure businesses for global expansion
  

Dubai offers:

• 0% CGT
  
• 0% tax on global investments
  
• No inheritance tax
  
• No dividend tax
  
• No wealth tax
  
• Fast banking
  
• Strong asset protection
  
• A business environment built for global mobility
  

This is why hundreds of UK founders now plan their exits from Dubai — not London.

Final Words from Haseena

If you are a founder, investor, or high-income professional, you already feel the shift. The UK treats your risk as taxable, your productivity as expected, and your success as suspicious. Dubai treats your ambition as an asset.

Your capital deserves to compound.
Your success deserves to be yours.
And your future deserves clarity, not uncertainty.

If you are even thinking about exploring alternatives, that’s your signal.
The world has changed — your residency strategy must change with it.

What Next

👉 Take the Wealth Reclaimed Scorecard
👉 Book a 20-min Strategy Call

• SRT assessment and exit timing
  
• UAE residency strategy (including Golden Visa)
  
• Corporate structuring for tax optimisation
  
• Banking and capital movement planning
  
• Preparing for a future business exit
  
• UAE investment frameworks
  
• Property acquisition strategy
  
• Full wealth architecture redesign
  
• Compliance guidance for a smooth transition
  
• Family relocation planning
  

Dubai Shift helps founders, investors, and high-income professionals legally restructure their residency, optimise their tax position, and transition to Dubai with clarity and confidence.
We turn complexity into a clear, compliant, strategic plan — empowering globally mobile wealth creators to build their next chapter on stronger foundations.