As Rachel Reeves scratches her head over how best to kill growth at the Winter Budget in just under two weeks, Guido Fawkes and Cut My Tax are launching a joint campaign against the heavily-rumoured exit tax. A disaster that will destroy what little remaining trust in the government that still exists on the part of entrepreneurs and the business community…
The tax as specified in pre-Budget briefings would impose a 20% levy on unrealised gains from all UK business assets when someone becomes a tax resident of another country. This includes shares in private companies and other instruments, even if they aren’t sold on departure. Madness…
Guido has previously reported on how calamitous this tax raid would be. Just this week, Britain’s fintech big beasts warned of an IPO exodus, and hundreds of founders have signed an open letter opposing the measure. It’s time to go further…
Below are ten key reasons why an exit tax is a dead end, and should be opposed. We at Guido and Cut My Tax will have more to say on this in the coming days as the Winter Budget looms. Sign up to our free daily email for more…
Click here to read the ten reasons why you should oppose the exit tax:
-
It’s a really bad look. It’s an admission that the U.K. is such a poor place to live that we need to try and prevent successful people from leaving.
-
The tax would kill a significant part of the start-up market. Entrepreneurs will not start businesses in Britain if they believe a significant chunk of their business, perhaps all, will have to be liquidated if they move, even temporarily, to live in another country.
-
The exit tax would be particularly catastrophic for Britain’s tech sector, which relies on attracting international talent. Those talented individuals wouldn’t come if they were forced to sell their shares and pay a tax when they moved elsewhere.
-
The tax would also be a red flag to internationally mobile established entrepreneurs who have made Britain a commercial hub for centuries. Britain has prospered because it was a commercially open country that attracted capital and talent. The tax would put an end to this successful approach and Britain’s reputation as a global player in business.
-
It breaks a basic social contract that people are free to leave the country if the rules are changed in a way they don’t approve of. To change the rules but then insist on punishing them if they leave is akin to tyranny.
-
A huge number of successful people would leave before the exit tax became effective. You can’t bring the tax in from Budget Day as it will effectively be retroactive as by that date the affected persons will already be UK resident for the 2025/26 tax year. It would need to come in from April 2026 at the very earliest.
-
Of course that would cause a huge and irretrievable stampede out of the country on the part of many successful people. The “wealth drain” would be gigantic, especially when added to the large number of non-dom departures. Many of those who leave will not build their businesses in Britain any further. Younger entrepreneurs would leave quickly, while valuations were still low, & build their business elsewhere. The trickle of entrepreneurial departures would turn into a flood.
-
It won’t raise much if any tax revenue. CGT already only brings in a mere 2% of tax revenue. Almost all countries that have an exit tax also have a deferral mechanism, meaning that tax is not due until the asset is sold. This means very little money would be derived from the exit tax in the initial years. Also, if the expat moves to one of the over 100 countries with a double tax treaty with the UK then the UK would have to give a tax credit for any foreign tax paid on the same gain. The effect of this is that the UK would get very little, if any, tax from people who move to treaty jurisdictions
-
Due to its effect in preventing new start-ups the revenue consequences of the tax on capital gains tax revenue will be negative in the medium and long-term.
-
It’s the effect of the exit tax on general tax revenues that will be most catastrophic. Britain is dependent on a very small number of taxpayers. The top 0.1% pay more income tax than the entire bottom 50%. Chase more of the top 0.1% out of the country and a large part of the tax base will be lost, with remaining taxpayers having to pay more.
![Boomers Show Up In Force for the 'No Kings' Anti-Trump Protests [WATCH]](https://www.right2024.com/wp-content/uploads/2025/10/Boomers-Show-Up-In-Force-for-the-No-Kings-Anti-Trump-350x250.jpg)
![Letitia James' Own Words Come Back to Haunt Her, Gets Cooked Online [WATCH]](https://www.right2024.com/wp-content/uploads/2025/10/Letitia-James-Own-Words-Come-Back-to-Haunt-Her-Gets-350x250.jpg)
