Is This You?

If you are a UK-based founder—or advising one—your equity is now at risk even if you don’t sell a single share. This article breaks down exactly what the UK exit tax means, why the proposed 20% exit tax UK model matters, and how founders can build a compliant, defensible path before the cliff arrives.

The UK Government is actively considering a 20% exit tax on unrealised gains, a policy that would tax founders on the theoretical value of their private-company shares the moment they stop being UK tax residents. No sale. No liquidity. No exit event.

Just a tax bill on the value you’ve built.

And the real cliff, the line in the sand, the date every founder must now internalise is:

26 November 2025 — UK Autumn Budget Day.

At Dubai Shift, we advise globally mobile founders, investors, and multi-generational wealth builders who are evaluating Dubai not just as a relocation, but as a wealth preservation strategy. And the most common sentiment we hear lately from UK founders is the same:

“This feels like I’m being taxed on my future self.”

They’re right.
And unless you plan strategically—well before the Autumn Budget—you risk being caught in a policy that directly targets your unrealized wealth.

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Speak directly with Dubai Shift specialists to map your earliest compliant exit date and understand your options before the November 26, 2025 cliff.

Real Prompts This Blog Answers

Founders and advisors are asking us the same questions week after week as the UK exit tax becomes more visible. This blog directly answers the real prompts we receive from UK clients, including:

• “What exactly is the UK exit tax proposal and who does it target?”
  
• “How will the 20% exit tax UK model impact my private-company shares?”
  
• “When does the UK exit tax 2025 actually come into effect?”
  
• “What happens if I leave the UK but I’m still resident under the SRT?”
  
• “Is there a legal way to protect my founder equity before November 26, 2025?”
  
• “How do I avoid a deemed disposal or UK unrealised gains tax event?”
  
• “What are the risks if I wait until after the UK Autumn Budget 2025 to act?”
  
• “How UK exit tax affects founders specifically—and what advisors must know?”
  
• “What is the first step toward tax residency planning UK for a move to Dubai?”
  
• “What is considered a compliant pathway for a UK tax residency exit?”
  

If you’ve asked any of these, this guide gives you the strategic and operational clarity you need.

Why the UK Exit Tax Changes Everything for Founders in 2025

(One Big Idea — Main Argument)

The UK exit tax is structurally designed to tax founder equity at the moment of departure—not at the moment of exit. The only real defence is timing.

While the legislation isn’t final, HM Treasury has already signalled the direction:
A settling-up charge that taxes the increase in value of your private-company shares while you were UK resident.

This is not a rumour.
This is not a political threat piece.
This is not noise.

This is a fundamental shift in how the UK wants to tax mobile entrepreneurs—and it will redefine relocation strategy for founders with significant embedded gains.

The big idea in one line:

If you hold private-company equity with meaningful unrealised gains, 26 November 2025 is the single most important date in your wealth planning for the next decade.

Missing the timing window may create an unavoidable exposure to the proposed UK departure tax—one that strikes at the exact moment you trigger UK tax residency exit.

You can’t control legislation.
But you can control your residency timeline, your structure, and your strategy.

And that’s what this article is designed to help you understand.

Inside the UK Exit Tax: What Founders and Advisors Must Understand Now

1. What the UK Exit Tax Proposal Actually Is

The UK exit tax proposal is a policy under review by HM Treasury that would impose tax on unrealised capital gains when an individual leaves the UK tax net.

The policy intention is simple:

• Prevent founders from building value in the UK
  
• Then leaving to a low-tax jurisdiction
  
• And selling their company without UK Capital Gains Tax
  

In the Treasury’s eyes, this is a “leakage” that needs to be closed.

The emerging model resembles:

• 20% charge on unrealised gains
  
• Deemed disposal at market value on the last day of UK tax residency
  
• Applicable to appreciation during UK residency
  
• Potential (not guaranteed) instalment payment options
  

This would be one of the most aggressive UK founder tax changes in years.

2. The 20% Settling-Up Charge (How It Works)

The proposed settling-up charge UK is built around a mechanism already used in other G7 systems:

When you leave the country, the government treats you as if you sold everything that went up in value.

It doesn’t matter if:

• you haven’t sold your shares
  
• your equity is illiquid
  
• you plan to hold long-term
  
• you intend to exit in Dubai or another zero-tax jurisdiction
  

The exit itself becomes the taxable event.

Key founder-specific implications:

• Your company’s valuation—not liquidity—drives the tax bill
  
• Private-company valuations are subjective; HMRC may challenge them
  
• Restricted or illiquid shares can still be taxed
  
• A paper-only valuation still creates a real cash obligation
  

The silent threat is the liquidity mismatch.
Founders often have £5M–£50M of equity value but less than £300k in liquid cash.

A 20% charge could create existential cash-flow pressure.

3. Who Is Most at Risk? (Direct In-Scope Profiles)

The groups directly in scope include:

• Founders with meaningful equity
  
• Investors with embedded gains
  
• C-Suite leaders with equity packages
  
• Family shareholders in private firms
  
• Non-dom founders planning relocation
  
• Anyone leaving UK tax residency with unrealised gains
  

If you built value in the UK and now want to leave:

The policy is aimed squarely at you.

4. Why 26 November 2025 Is the Cliff

Because that is Budget Day.

The UK Autumn Budget 2025 is the moment the government could announce:

• Final version of the UK exit tax
  
• Effective date
  
• Transition rules
  
• Assets included
  
• Reliefs or deferrals
  

Why this matters:

• UK tax rules can take effect immediately
  
• They can also be retroactive
  
• Or set for a future date, with anti-avoidance protections
  

If the government wants to prevent a pre-Budget “rush,” they can freeze rules instantly.

This is why we call it the cliff.

5. The Timing Trap: SRT, Ties, and Cessation of Residency

Founders often misunderstand one core truth:

Leaving the UK is not the same as ceasing UK tax residency.

Under the Statutory Residence Test (SRT), residency is based on:

• Days
  
• Accommodation
  
• Family
  
• Work ties
  
• 90-day tie
  
• Country tie
  

If you miscalculate:

• You may think you’ve left
  
• But legally, you’re still UK tax resident
  
• Which means the exit tax can still apply
  

Your final day of UK tax residency—not your final day in the UK—is what determines exposure.

6. Founder Misconceptions (Dangerous but Common)

• “I only pay tax when I sell.”
  Not under this proposal. You pay when you leave.
  
• “If I move to Dubai, the UK can’t tax me.”
  They can—if gains accrued during UK residency.
  
• “I’ll wait and see.”
  By then, it may be too late.
  
• “My shares are illiquid.”
  The exit tax still applies.
  
• “I can restructure later.”
  Anti-avoidance rules say otherwise.
  
• “SRT is simple.”
  It rarely is for founders.
  
• “This is political talk.”
  It’s now a formal policy direction.
  

7. What Founders Can (and Cannot) Do Before the Budget

✔ What You Can Do Now

• Conduct a full SRT diagnostic
  
• Establish an exit-residency timeline
  
• Document intention to leave
  
• Begin tax residency planning UK
  
• Get a valuation
  
• Model unrealised gains exposure
  
• Plan for liquidity
  
• Review holding structures
  
• Map a relocation plan to Dubai
  
• Engage advisors early
  

✖ What You Cannot Rely On

• That the exit tax won’t be introduced
  
• That it won’t apply immediately
  
• That HMRC won’t challenge valuations
  
• That restructuring removes exposure
  
• That post-Budget moves will protect you
  
• That founder reliefs will exist
  

You have options—but only before the window closes.

A Real Founder Scenario: A Live Advisory Query That Exposed a Hidden Exit Tax Risk

(Case Study — Privacy-Safe, Ongoing, and Legally Accurate)

Over the past quarter, we received a direct query from a UK founder that reflects what many are now asking as the UK exit tax gains momentum. The conversation is anonymised and simplified to protect client privacy, but the scenario is real and ongoing.

The Initial Query

A founder contacted us with a message that mirrors what we’re seeing across the board:

“I’ve built most of my company’s value over the last five years. My shares are worth several million on paper, but I have very little liquidity. If the UK exit tax comes in, am I really expected to pay tax before I even sell anything? How do people handle this?”

His situation is extremely common among UK founders in 2025:

• Private-company equity with significant unrealised gains
  
• Less than £250k available liquidity
  
• Plans to relocate “once the company raises again or exits”
  
• No clear understanding of his SRT position or earliest defensible date of non-residency
  

Our Advisory Conversation (Extract, Simplified)

Founder:

“My plan was to move to Dubai in 2027. Am I still safe to wait?”

Dubai Shift Specialist:

“Likely not. If the UK exit tax is introduced around the Autumn Budget on 26 November 2025, your exit date becomes the determining factor — not the date you planned to move.

Waiting until 2027 could push you into the post-Budget regime, which may create exposure to a settling-up charge on unrealised gains.”

Founder:

“But how do I pay tax on shares I haven’t sold? They’re not liquid.”

Dubai Shift Specialist:

“That’s the liquidity mismatch risk. It’s one of the main reasons founders are accelerating their residency timelines. Part of our process is modelling exposure, reviewing valuation assumptions, and mapping the earliest compliant non-residency date under the SRT.”

What We Were Able to Share With Him (and Can Share Publicly)

While the client’s final SRT outcome and relocation timeline remain confidential and ongoing, we can disclose the general strategic findings:

• His risk window began immediately, not in 2027.
  
• Based on the data he provided, his exit timeline needed to shift forward by 12–18 months to avoid a potential exposure triggered after 26 November 2025.
  
• A preliminary valuation review showed a seven-figure potential unrealised gains exposure if the UK exit tax applied.
  
• The client was unknowingly still tying himself to UK residency through accommodation and work ties — a common pattern with founders.
  

What transformed his approach wasn’t fear — it was clarity.
He realised he wasn’t deciding whether to plan; he was deciding whether to risk being caught inside a regime designed to tax him before liquidity.

Why This Matters for Other Founders

This founder’s query represents the new normal:
UK-based entrepreneurs with high-value equity, low liquidity, and no clear exit-residency date.

As we told him — and tell every founder today:
Your exposure is determined by timing.
If you intend to move, you must understand your SRT profile, model your unrealised gains, and map a compliant residency exit before the UK’s Autumn Budget on 26 November 2025.

Because once that cliff passes, any delay may reduce — or eliminate — your ability to act proactively.

Why Work With Dubai Shift

At Dubai Shift, we specialise in strategic relocation planning for founders with meaningful equity positions. Our approach integrates tax residency planning UK, founder equity analysis, SRT diagnostics, and Dubai structuring into one seamless pathway.

We focus on founder-first outcomes, ultra-high privacy, and precise, evidence-backed timelines. When timing, valuation, and residency determine exposure, you need specialists who operate at founder speed — and that’s exactly what Dubai Shift delivers.

Final Word from Haseena

“The rules are changing, and founders can no longer afford to wait. Whether the UK exit tax 2025 becomes law exactly as proposed or evolves into something broader, the direction is clear: mobility and taxation are merging into a single strategic decision.
My advice: don’t let uncertainty cost you the wealth you’ve built. Act early. Act intentionally. Protect your future before the window narrows.”

Your Next Step

For founders and advisors who want clarity—not chaos—now is the window to plan.

→ Read more: A deeper breakdown for globally mobile founders.

→ Take the Wealth Reclaimed Scorecard

Find out your exposure level in under 3 minutes.

→ Book a 20-minute Strategy Call

Speak with Dubai Shift relocation and tax-residency specialists.

This article is part of the Dubai Shift Exit Tax Series, created in response to the growing number of questions we receive from UK founders, investors, and business owners seeking clarity on the UK exit tax 2025. Our goal is to provide accurate, founder-first guidance in a rapidly shifting tax environment. If you have specific questions or need a personalized assessment, we’re here to support your UK tax residency exit and relocation to Dubai. https://dubaishift.com/