Tech millionaire Herman Narula plans Dubai move over 'bonkers' UK exit tax

Self-made chief executive blames 'anti-entrepreneur' policies he says will push out companies

Herman Narula, co-founder and chief executive at Improbable, has said he is preparing to move to Dubai. Getty Images

Technology entrepreneur Herman Narula has said he intends to relocate to Dubai before the anticipated introduction of a UK “exit tax” on the wealthy.

Mr Narula, Britain’s richest self-made millionaire under 40, said he had made the decision because of the government’s “anti-entrepreneur” policies that would drive new companies abroad. He would join a growing list of people moving to Dubai after becoming disillusioned with life in Britain.

The chief executive of technology company Improbable, 37, told The Telegraph it was “bonkers” that new taxes should target “great British start-ups”.

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There has been speculation that Chancellor Rachel Reeves is planning to introduce a capital gains tax which would apply when a wealthy person leaves the UK to live in a different country.

Her intention would be to deter high net worth individuals from taking their money elsewhere to avoid paying UK taxes.

Hundreds of business owners and investors have signed an open letter organised by campaign group Startup Coalition calling on Ms Reeves to refrain from introducing the “settling up charge”.

“A potential exit tax would not only tell founders that their ideas and innovations aren’t welcome, but that they should either get out early or not come at all,” the letter said.

Mr Narula, who is worth £700 million ($918 million), said he did not “particularly” wish to leave the UK, but might have wanted to one day. He was acting now, because he didn’t want to be “banned from that option”, he said.

He described an exit tax as “irresponsible” and warned it was forcing people to leave. Concerns have been raised that it could also deter entrepreneurs from setting up companies in the UK.

Mr Narula, who was born in India but became a British citizen after studying at Cambridge University, said speculation over what Ms Reeves would do meant it was “too unstable and too risky” to remain in the UK. He learnt to code aged 12 and established Improbable aged 29.

The company describes itself as a “venture builder” working in AI, Web3 and the metaverse to “create and grow businesses that define the future”. It has developed products in AI and cryptocurrency, defence and gaming. It was valued at $3.4 billion in 2022, with Mr Narula’s stake just under a third of the business.

“The impression I am left with is that the country doesn’t want immigrants, especially not ones that start companies,” he said.

Britain's Chancellor of the Exchequer Rachel Reeves has been warned her tax plans could deter entrepreneurs from setting up in the UK. Reuters

Dubai has become a preferred destination for many British workers and entrepreneurs unhappy at the charges that have been introduced since the Labour government came to power in July last year.

A record 691 millionaires left the UK in April after tax reforms took effect, a 79 per cent increase on last year, with Dubai, Italy and Greece popular destinations. New World Wealth, a consultancy group, found that London had lost 11,300 millionaires in the last year, a higher proportion than anywhere else bar Moscow.

Many are now heading to the UAE, with the emirates experiencing a net inflow of 9,800 millionaires from around the world in the past year. A large chunk of those are Britons disenchanted with Labour’s decision to axe “non-dom” status.

Last month, FinTech magnate Nik Storonsky of the bank Revolut revealed he had joined the departures from the UK to the UAE.

Other prominent leavers reportedly included Nassef Sawiris, the Egyptian tycoon; Shravin Mittal, the Indian businessman; John Fredriksen, the Norwegian-Cypriot shipping magnate; Richard Gnodde, the South African-born vice president of Goldman Sachs, and former footballer Rio Ferdinand.

Polling by think tank Adam Smith Institute found 28 per cent of British people aged between 18 and 30 year olds were considering emigrating.

As well as the abolition of the non-dom status, which allowed UK-based people to claim their permanent home was abroad to avoid paying tax on foreign income, Ms Reeves has not ruled out breaking manifesto promises not to raise income tax, national insurance or VAT.

She has warned of “tough choices” due to the “difficult economic backdrop” as she tries to boost the sluggish economy, which has stymied the government’s attempts to reduce taxes for the lowest earners. Changes to stamp duty, council tax and tax-free ISA savings limits have also been mooted.

The government has said it is not currently considering a wealth tax – an annual charge for those with assets exceeding a certain threshold.