The Nominal Trap: Why Capital Gains Rate Isn't the Problem
The UK's capital gains tax rate is 24% for higher earners. Reasonable by international standards. Revolut is valued at $75 billion. Nik Storonsky's stake—approximately 29%—could be worth over $20 billion. At 24%, that's potentially over $5 billion in tax.
Storonsky has moved to Dubai, where capital gains tax is 0%.
But here's what gets lost in the discourse: Storonsky isn't evading anything. He isn't avoiding anything. He's simply exercising the same freedom of movement that every person has—the right to choose where to live. As a non-UK resident, he has no liability for UK personal income tax or capital gains tax. As someone who immigrated to the UK to build a business, he never owed the UK his permanent residence.
The question isn't moral. It's practical: what policy actually maximizes UK benefit?
The Mathematics of Scale
For most people, capital gains tax works as intended. You sell an investment, pay 24% on the gain, move on with your life. The rate is designed for typical amounts—a rental property sold for £200,000 profit, shares cashed out for £50,000.
But tax policy designed for thousands doesn't scale to billions.
At founder-scale wealth, the calculus undergoes a phase transition. Water doesn't get "a little frozen"—it's liquid until 0°C, then solid. Similarly, the decision to emigrate isn't gradual. Below a certain wealth threshold, staying in the UK makes sense. Above that threshold, the numbers become so astronomical that relocation becomes economically rational regardless of other factors.
Consider the mathematics:
- A £3 billion gain at 24% CGT = £720 million in tax
- That £720 million, invested at 5% annual return, generates £36 million per year
- The cost of relocating to Dubai: negligible for someone with these resources
- UAE capital gains tax: 0%
The break-even calculation takes approximately thirty seconds. The decision follows shortly after.
The Revolut Reality
Revolut's November 2025 funding round valued the company at $75 billion—a 67% increase from its $45 billion valuation just a year earlier.[1] The deal was led by Coatue, Greenoaks, Dragoneer, and Fidelity, with participation from Andreessen Horowitz and even NVIDIA's venture arm.
Nik Storonsky, who co-founded Revolut in 2015 after stints at Credit Suisse and Lehman Brothers, holds approximately 29% of the company through a Musk-style incentive structure that allows his stake to grow as valuation hurdles are met.[2] At $75 billion, his stake is worth roughly $22 billion—approximately £18 billion.
{{< company slug="revolut" >}}
In October 2025, a Companies House filing revealed that Storonsky had changed his place of residence to the United Arab Emirates the previous year.[3] He joins a growing list of wealthy entrepreneurs leaving Britain following the abolition of the non-domiciled tax status, which previously allowed foreign nationals to avoid UK tax on overseas income and gains.
The move could save him more than £3 billion in UK capital gains tax.[4]
What Storonsky Has Actually Paid
Before the "billionaire flees to Dubai" framing takes hold, consider the context.
Revolut posted profit before tax of £1.1 billion in 2024, with an implied tax charge of around £310 million based on the difference between pre-tax and post-tax profit.[5] While the exact UK corporation tax component isn't publicly broken out, a substantial portion of this tax revenue flows to HMRC given Revolut's significant UK operations and workforce.
More importantly, Revolut employs thousands of people in the UK. These employees pay income tax. They pay National Insurance. They spend money that generates VAT. They buy houses that generate stamp duty. The economic multiplier from a company like Revolut extends far beyond any single founder's personal tax bill.
The company's 2024 revenue grew 72% to $4 billion. Its global retail customer base surpassed 65 million. Revolut Business achieved $1 billion in annualized revenue. This is a company that created enormous value while headquartered in London.[6]
Storonsky isn't leaving because he's greedy. He's leaving because the numbers don't make sense.
The Biological Parallel: Fitness Landscapes
Evolutionary biologists describe fitness landscapes as topographical maps where height represents reproductive success. Organisms traverse these landscapes seeking peaks—local optima where they're well-adapted to their environment.
Tax policy creates a fitness landscape for wealth. Below certain thresholds, the UK represents a peak—good infrastructure, rule of law, talented workforce, access to capital. Founders thrive here. The "cost" of paying taxes is offset by the benefits of operating in a sophisticated economy.
But as wealth scales, the landscape transforms. What was a peak becomes a valley. The same location that optimized success at £10 million actively harms outcomes at £10 billion. The terrain hasn't changed—the organism's position on the fitness dimension has.
Rational actors don't stay in valleys when peaks exist elsewhere. Dubai, with its 0% capital gains rate, zero income tax, and increasingly sophisticated financial infrastructure, represents a higher peak on the wealth-preservation dimension. The only question is whether the organism can reach it.
For billionaire founders, the answer is obviously yes.
The Framing Problem
The discourse around founder emigration typically takes one of two forms:
Framing A: "Billionaire tax dodger flees to Gulf state"
This framing treats emigration as morally suspect—an evasion of civic duty, a betrayal of the country that enabled success. It assumes that wealthy individuals owe permanent residence to their place of business formation, regardless of how tax policy treats them.
Framing B: "Immigrant exercises freedom of movement"
This framing recognizes a basic fact: Storonsky was born in Russia, moved to the UK to work in finance, renounced his Russian citizenship after the Ukraine invasion, and holds British and French passports.[7] He chose to build a company in the UK. He can equally choose to live elsewhere.
Non-residents simply aren't liable for UK personal income tax or capital gains tax. This isn't a loophole—it's how tax residency works in virtually every jurisdiction. The UK taxes UK residents on worldwide income. It doesn't tax non-residents on income earned outside the UK.
The question isn't whether Storonsky is doing something wrong. He isn't. The question is whether UK policy should be designed to retain more value from founders who would otherwise leave.
Source-Sink Dynamics
In ecology, source-sink dynamics describe how populations flow between habitats. A "source" habitat produces more individuals than it can sustain—they emigrate to other areas. A "sink" habitat cannot sustain its population without immigration from sources.
The UK is becoming a source habitat for founder wealth.
British universities educate talented individuals. British capital markets fund early-stage companies. British infrastructure and rule of law enable businesses to scale. Then, when these businesses reach liquidity events, the founders emigrate to sink habitats—Dubai, Singapore, Monaco—that capture the wealth the UK ecosystem created.
This isn't just Storonsky. In 2024, an estimated 10,800 millionaires left the UK—a 157% increase from 2023, according to Henley & Partners data (though the methodology has been disputed).[8] Lakshmi Mittal, the steel magnate worth £15.4 billion who lived in the UK since 1995, recently moved to Dubai citing inheritance tax concerns.[9] Herman Narula, co-founder of tech firm Improbable, publicly blasted what he called the "bonkers UK exit tax" proposals, arguing they amount to "anti-entrepreneur" policies.[10]
The pattern is clear: the UK invests in creating founder wealth, then drives that wealth elsewhere through tax policy that doesn't account for scale effects.
The Exit Tax Temptation
The obvious policy response is an exit tax—taxing unrealized gains when individuals leave the UK. Chancellor Rachel Reeves has reportedly considered a 20% "settling-up charge" on certain assets upon departure, which could raise approximately £2 billion.[11]
But exit taxes have their own problems.
First, they create perverse incentives at the margin. A founder who might have stayed for another five years and created thousands of additional UK jobs might leave earlier to avoid a higher exit tax bill. The anticipation of policy change accelerates the very emigration it's designed to prevent.
Second, exit taxes are crude instruments that don't distinguish between "leaving to avoid tax" and "leaving for legitimate business reasons." Revolut is expanding into 30 new markets by 2030. A CEO might reasonably want to be closer to growth regions—that's not tax avoidance, it's business strategy.
Third, exit taxes can be structured around. Founders can move before exits, establish residency elsewhere while companies are still private, or simply never trigger the taxable event while resident in the UK. The game of cat and mouse advantages those with sophisticated tax advice—which, at the billionaire level, is everyone.
What Would Actually Work
The insight from the fitness landscape model is that founders face a binary choice: pay massive amounts or pay nothing. There's no middle ground.
What if there were?
Consider a structured reinvestment regime:
Option A (Current System):
- Founder sells shares, owes 24% CGT immediately
- No flexibility, no incentive to stay
- Rational response: emigrate before sale
Option B (Reinvestment Structure):
- Founder commits to reinvesting X% of proceeds in UK-qualifying investments
- CGT deferred on reinvested portion
- If investments maintained for 5-10 years, partial forgiveness
- If founder leaves UK, deferred tax becomes due
This creates a middle path. A founder who genuinely wants to reinvest in the UK ecosystem—backing new startups, funding growth companies, investing in infrastructure—can do so tax-efficiently. A founder who just wants to extract and consume pays full rates.
The key insight: there is a reasonable amount founders would be willing to pay to remain in the UK ecosystem with its advantages. The current system offers no way to capture that willingness. It's all or nothing, and nothing is increasingly winning.
The Uncomfortable Arithmetic
Let's do the math on what the UK might have captured versus what it will actually receive.
Scenario A: Storonsky stays, full CGT applied
- Estimated stake value: £18 billion
- CGT at 24%: £4.3 billion
- Probability he pays this: ~0%
Scenario B: Storonsky stays, reinvestment structure
- Reinvests 50% in UK-qualifying assets
- CGT deferred/reduced on £9 billion
- Pays full CGT on £9 billion: £2.15 billion
- UK retains £9 billion in ecosystem investment
- Probability: higher than Scenario A
Scenario C: Storonsky leaves (actual)
- CGT paid to UK: £0
- UK ecosystem investment: unknown, likely reduced
- Revolut continues paying UK corporation tax, but founder wealth leaves
The UK is choosing Scenario C by default because it refuses to offer Scenario B. Perfect becomes the enemy of good.
The Broader Pattern
This isn't just about one founder. The £100k tax trap, the 90-day option exercise window, stamp duty on housing transactions—UK tax policy repeatedly creates cliff edges where small changes in circumstance trigger massive changes in outcomes.
Cliff edges cause organisms to cluster just below thresholds or jump entirely to new habitats. You see this in the income distribution around £100k, where the personal allowance taper creates 60%+ effective marginal tax rates. You see it in founders timing exits to occur after establishing foreign residency. You see it everywhere tax policy creates discontinuous incentives.
The biological principle is simple: smooth landscapes produce smooth behavior. Cliff landscapes produce clustering and jumping.
The Reeves Reversal
The UK government appears to be recognizing the problem—albeit slowly.
In late 2025, reports emerged that Rachel Reeves was "quietly trying to put a halt to the wealth and brain drain" by considering modifications to the non-dom abolition.[12] The government expected non-dom changes to raise £39.5 billion over coming years, but that projection assumed taxpayers would stay and pay rather than leave and pay nothing.
The tension is real: the government needs revenue, but aggressive taxation of mobile capital produces less revenue than moderate taxation, because the capital moves.
This is the Laffer curve in action, but for residency rather than work effort. Push tax rates high enough and the tax base disappears—not because people work less, but because they live elsewhere.
What Biology Teaches
The natural world is full of examples of organisms adapting to tax-like pressures. Trees in nutrient-poor soils grow slower but live longer. Animals in predator-rich environments become nocturnal or develop camouflage. Species facing environmental stress either adapt, migrate, or go extinct.
Founder wealth is responding to UK tax policy the same way: by migrating.
The UK can respond in three ways:
1. Accept the exodus. Acknowledge that the very wealthy will leave, focus on taxing those who remain, and optimize policy for the middle rather than the top. This is intellectually coherent but economically costly—it turns the UK into a training ground for talent that creates value elsewhere.
2. Build walls. Implement aggressive exit taxes, extend tax obligations, make leaving expensive. This is what France tried and partially abandoned. It creates adversarial relationships with precisely the people you want creating companies.
3. Create better habitats. Design tax structures that make staying attractive rather than leaving punitive. Offer reinvestment incentives, deferred taxation, conditional forgiveness. Compete for mobile capital rather than trying to trap it.
Option 3 requires abandoning the moral framing that treats wealthy individuals as owing something beyond what law requires. It requires acknowledging that founders like Storonsky genuinely have choices, and that capturing some value is better than capturing none.
It requires, in short, policy pragmatism over symbolic politics.
The Question That Matters
Every article about founder emigration gets caught up in whether it's fair, whether the person is greedy, whether they owe something to the society that enabled their success.
Those questions are interesting but irrelevant to policy design.
The question that matters is simple: Does the UK prefer 24% of zero or 10% of £18 billion?
Right now, it's choosing 24% of zero.
The rate isn't the problem. The nominal amount is. And until UK policy acknowledges that founder-scale wealth operates under different physics than ordinary income, the source-sink dynamic will continue. The UK will train founders, fund early companies, provide sophisticated infrastructure—and watch the value flow to Dubai.
Nik Storonsky built a £75 billion company in London. He's choosing to live elsewhere. Both of those facts can be true. The only remaining question is what policy would have kept more value in the UK while respecting his freedom to choose.
This article was developed after conversations with contacts at the Treasury, HMRC, and leading representatives in government of the UK startup ecosystem in mid-January 2026.
Related mechanisms: fitness-landscape | phase-transitions | source-sink-dynamics | path-dependence
Sources
[Revolut hits $75B valuation in new capital raise](https://techcrunch.com/2025/11/24/revolut-hits-75b-valuation-in-new-capital-raise/), TechCrunch, November 24, 2025. ↩
[Revolut founder Storonsky Raises His Stake to 29%](https://en.thebell.io/revolut-founder-storonsky-raises-his-stake-to-29-the-holding-is-worth-nearly-25bn/), The Bell. ↩
[Revolut's Billionaire CEO Moves Residence From UK to Mideast](https://www.bloomberg.com/news/articles/2025-10-07/revolut-s-billionaire-ceo-shifts-residence-from-uk-to-mideast), Bloomberg, October 7, 2025. ↩
[Could we have stopped Revolut's founder from leaving the UK?](https://taxpolicy.org.uk/2025/10/11/revolut-founder-uk-exit-tax/), Tax Policy Associates, October 11, 2025. ↩
[Record growth and diverse product offering drive Revolut to $1.4bn profit in 2024](https://www.revolut.com/news/record_growth_and_diverse_product_offering_drive_revolut_to_1_4bn_profit_in_2024/), Revolut, 2025. ↩
[Revolut Group 2024 Annual Report](https://www.revolut.com/annual-report/2024/), Revolut. ↩
[Nik Storonsky](https://en.wikipedia.org/wiki/Nik_Storonsky), Wikipedia. ↩
[First the millionaires, now the billionaires: Fears for Britain's next great exodus](https://www.thenationalnews.com/news/uk/2025/12/26/billionaires-leaving-britain-uk-exodus-tax-regime/), The National, December 26, 2025. ↩
[Rich UK Families Brace For Rachel Reeves' Budget Tax Hit](https://www.bloomberg.com/news/articles/2025-11-18/wealthy-uk-families-overhaul-fortunes-after-labour-s-return-to-power), Bloomberg, November 18, 2025. ↩
[Why Britain's Exit Tax Is Driving Millionaires to Dubai](https://maphomesrealestate.com/blogs/britain-exit-tax-pushing-millionaires-to-dubai), Map Homes Real Estate. ↩
[Rachel Reeves Targets UK's Wealthy With Exit and Mansion Taxes Among Options](https://www.bloomberg.com/news/articles/2025-11-03/reeves-targets-uk-rich-with-exit-and-mansion-taxes-among-options), Bloomberg, November 3, 2025. ↩
[Britain Tries to Fix Its Frayed Relations With World's Rich](https://www.bloomberg.com/news/articles/2025-11-27/britain-tries-to-fix-its-frayed-relations-with-the-world-s-rich), Bloomberg, November 27, 2025. ↩