For UK Tech Founders

Addressed to a UK tech founder reading this on the train. You hold significant unlisted shares in a UK trading company. The April 2026 reform changes what happens to those shares if you die. This piece is for you specifically.

For UK tech founders

If you are a UK tech founder holding significant unlisted shares — and your share value above £2.5 million — your family will pay inheritance tax at an effective rate of 20 per cent on the part above that allowance. The pre-reform position, in which qualifying business assets passed entirely outside the inheritance tax base, no longer applies above the threshold. This piece walks through what that means from your seat.

The thing that should land first

You are the most affected cohort in the UK tech ecosystem. You are also the cohort whose response to the change matters most for the country's economic future. Those two things create a particular weight on what you decide to do, and one defensible reading is that the choices facing you are worth taking seriously by name.

You will probably hear three kinds of advice over the next few years.

From advisors. Get insurance. Restructure into discretionary trusts. Look at your residence position. Consider where you actually want to live. The advisor's job is to minimise your family's exposure within the rules. Most of this advice will be technically correct and worth following on its own terms.

From peers. Some founders you know will leave. Dubai, Lisbon, Milan, sometimes Singapore. Some will tell you they are leaving for tax. Some will tell you they are leaving for lifestyle and tax is a contributing factor. Some will say nothing and just be gone. The Companies House data on UK director departures is up materially since the October 2024 budget. The data is contaminated by other tax changes, so you should not read it as proof. But the direction is clear and the conversations you will have will reflect it.

From the political debate. Loud, polarised, and mostly unhelpful for actually thinking through your situation. Headlines about millionaires fleeing or billionaires whining will land and bounce. The substantive analytical questions — the principle question (whether intergenerational business wealth should be taxed at all) and the timing question (whether the tax should fall at death or at realisation) — are largely separate from the volume-and-rates framing the public debate uses. The publication treats both as genuinely contested and presents the strongest case for each side without verdict.

What is actually different now from your perspective

Before April 2026, your shares were treated as a permanent tax shelter. Whatever value the company built, your family inherited that value tax-free if you died holding the shares. This was unusual internationally — most major economies tax intergenerational transfers of business wealth somehow, even those that do not have a separate inheritance tax. The UK pre-reform position was at one extreme of the international spectrum.

From April 2026, the shelter holds for the first £2.5 million per person — £5 million if you and your spouse can both use the allowance. Above that, the tax falls at 20 per cent effective, payable over ten years interest-free.

If your stake is worth £20 million, and you and your spouse both use the allowance, your family's eventual liability is around £3 million, payable as £300,000 a year for ten years. If your stake is worth £100 million, the eventual liability is around £19 million, payable as £1.9 million a year for ten years. These are headline numbers. Real cases involve valuation discounts (the SAV process typically settles at 50-70 per cent of headline paper value), preference-stack adjustments, and a range of legitimate planning moves that change the picture.

Two structural points matter more than the numbers.

The valuation is contested. What HMRC's Shares and Assets Valuation team agrees the shares are worth is a negotiation, not a market price. The negotiation can take several years and the answer can move by 30-40 per cent depending on who is doing the modelling. This is in addition to the tax bill itself.

The cash to pay the tax may not exist. The instalment plan helps. But £300,000 a year for ten years, paid out of an estate where most of the value is locked up in growing-company shares, is a real cash flow problem if the company does not pay dividends.

The two questions, and the publication's posture on each

The principle question. Whether intergenerational business wealth at very large scale should be brought into the inheritance tax base at all. The principle piece sets out the strongest case for taxing such transfers (distributional outcomes, dynamic effects on heirs documented in Holtz-Eakin/Joulfaian/Rosen and the replication literature with the identification critiques named, horizontal equity, political-economy capture) and the strongest case against (Nozickian property-rights, Hayekian capital-formation, Epstein efficiency, asset-class-fitness) at roughly equal length and in the voice of each side's strongest defenders. The publication does not pick a side. A reader who concludes the case for carries and a reader who concludes the case against carries are both in defensible territory on the evidence available.

The timing question. If the principle question is resolved in favour of taxation, whether the tax should fall at death (the mechanism the reform adopts) or at realisation (the mechanism Australia has used for forty years for inherited assets). The timing piece sets out the strongest case for tax-at-death (administrative settledness, alignment with ownership transfer, lock-in literature, Australian regime's documented track record on deferral and valuation-gaming) and the strongest case for tax-at-realisation (valuation, liquidity, pre-emptive relocation pressure, better-legible values) at equal length and without verdict. The four positions in the long article — hold the existing mechanism (A), switch to CGT-on-realisation (B), adopt practical fixes and defer (C), raise the threshold for qualifying unlisted trading-company shares (D) — are four design responses to the timing question with the practical measures common ground across all four. Each is presented in the long article with case-for and case-against in equal length. The publication does not adjudicate between A, B, C, and D.

The hard question for you specifically

The hard question for you, given the regime now exists, is what you do — separately from whether you find the principle case for or the principle case against more persuasive, and separately from which of the four design positions you prefer.

You can leave. Many founders have. Some of those who left are happier, some are not, some report that their effective tax position is better and some report that it is roughly the same once they account for the costs of relocation. Leaving is not a free move and it is not always a winning one financially even if the headline rates are lower abroad.

You can stay and plan. Most founders who can afford specialist tax advice will end up with structures that materially reduce the eventual exposure — discretionary trusts established before death, life insurance held in trust to fund the bill, careful timing of dilutions and exits, residence planning that uses the post-2025 long-term-residence framework rather than fighting it. Most affected founders will not pay the headline 20 per cent on the headline value. They will pay materially less, and the planning is open to them and explicitly within the rules.

You can stay and not plan. Not all founders have the appetite or the resources for elaborate planning. For some, the instalment plan is enough — your family takes the bill, pays it out of dividends or eventual realisation, and the company continues. This is the case the government has built the regime around, and for some affected estates it will work as designed.

You can engage with the debate. Founders have not historically been a loud cohort in UK tax-policy discussion. Whether they should engage more is a question for each founder; the publication does not tell you to advocate, does not tell you to stay quiet, and does not tell you which position to support if you do engage. The four positions in the long article are set out at equal weight precisely so a reader can reach their own view rather than be guided to one.

What the publication is not asking you to do

It is not asking you to leave. It is not asking you to stay. It is not telling you what your tax planning should look like. The author is a founder himself, in the affected cohort, and is not a position to advise.

What the publication is asking, gently, is that you read what is here, form your own view, and engage with the question rather than treat it as settled in either direction. The current public debate is not serving the country well. A more thoughtful debate, conducted with the actual affected cohort participating, would be a useful thing.

Written by Claude (Anthropic). Doug is a UK tech founder who was born in the UK, lived overseas, and came back. His companies have always been UK-owned, UK-operated, UK-tax-paying. He has invested personal money directly and indirectly into hundreds of very-early-stage UK tech companies and advised many more — the standing this publication is written from. He adapted his own position when the BPR reform was announced; many in his cohort did not. The outcome has minimal effect on him personally now; he has been raising the question with government for some time and the publication is what AI tools made it possible for him to express. He has been clear about that throughout the publication. About 1,800 words.