This is Capital Signal—timely briefings on what's changing in private markets, wealth structures, and founder behaviour. Playbooks explain the system. Signals track what's shifting.
Week in 30 Seconds
Three things happened this month that most founders won't connect until it's too late: the UK's new FIG regime mechanics got clearer, Italy hiked its flat tax to €300k, and middle-market M&A confidence hit a six-year high.
The common thread? Jurisdictions are now competing for mobile founders the way software companies compete for enterprise customers.
The founders who treat residency as a capital strategy—not a lifestyle choice—will come out ahead.
The UK's FIG Regime: A 4-Year Runway, Not a Permanent Home
The UK's Foreign Income and Gains (FIG) regime replaced the old remittance basis on 6 April 2025. The headlines called it "the end of non-dom status." The reality is more nuanced—and more useful if you understand the mechanics.
What actually happened:
The new regime offers 100% relief on eligible foreign income and gains for your first four tax years of UK residence. You can bring that money into the UK without triggering additional tax. After four years, you're taxed on worldwide income like everyone else.
But here's the catch: eligibility requires 10 consecutive years of non-UK residence before arrival. If you popped back to London for a year in 2018, you don't qualify. The Statutory Residence Test determines your status, and it counts split years.
The Temporary Repatriation Facility matters more than most realise:
For those who previously used the remittance basis and have stockpiled foreign income offshore, there's a Temporary Repatriation Facility (TRF) running through 2027/28. The rates: 12% for 2025/26 and 2026/27, rising to 15% for 2027/28. You don't need to physically move the funds during the designation year—you just need to elect on your tax return.
That 12% window closes in 15 months. If you're sitting on significant offshore gains from the remittance basis era, the maths on bringing them home now versus later is worth running.
One critical detail most summaries skip:
HMRC's position is that cryptocurrency gains are not eligible for FIG relief. Their view: gains on crypto disposal are situated where the beneficial owner is resident. So if you're UK resident and sell crypto, that's a UK gain—full stop. The FIG regime doesn't help.
What this means for you:
If you're a founder considering UK residence, the FIG regime creates a four-year window to be strategic about where income arises and when gains crystallise. That's not a permanent solution—it's a runway. Plan the exit from day one.
And if you've already been in the UK for more than 4 years post-arrival? You're on an arising basis now. The TRF is your one remaining lever for historical offshore accumulations.
Italy Raised Its Flat Tax to €300k. It Still Might Make Sense.
Italy's 2026 Budget Law raised the annual lump-sum tax for new residents from €200,000 to €300,000. Family members jumped from €25,000 to €50,000 each. This is the third increase in three years—from €100k in 2023, to €200k in 2024, to €300k now.
The instinctive reaction: "Italy just priced itself out." The maths tells a different story.
For founders with foreign income above €1 million:
A €300k flat payment on €3 million of offshore income is a 10% effective rate. Progressive rates elsewhere in Europe run 45-50% on that same income. The regime also exempts you from Italian wealth tax, inheritance tax, and foreign-asset reporting requirements on offshore holdings.
For a family of four, the all-in cost goes from €250k to €400k under the new rates—a 60% jump. That's material if you're at the lower end of the target demographic. But for households earning mid-seven figures from foreign sources, Italy remains cheaper than most alternatives.
Grandfathering protects existing users:
If you moved to Italy and elected into the regime before January 2026, you keep your original rate for the remainder of your 15-year term. The new €300k applies only to arrivals from 2026 onward. PWC's analysis confirms the regime structure is otherwise unchanged.
The bigger picture:
Italy is one node in an increasingly competitive market. Portugal's NHR replacement (IFICI) has more restrictive conditions. Greece offers €100k plus €20k per family member but with investment requirements. Switzerland's lump-sum taxation faces growing scrutiny.
The playbook for mobile founders: compare jurisdictions like you'd compare enterprise vendors. Tax is one variable. Banking access, regulatory friction, time zone alignment, talent availability, and quality of life are other factors. No single jurisdiction wins on every dimension.
M&A Confidence Just Hit a Six-Year High
Citizens' 15th annual M&A Outlook, released this month, surveyed 400 middle-market companies and PE firms. The headline: 58% now characterise the M&A environment as strong—the highest reading in six years.
But the more interesting signal is what happened to PE confidence across 2025. In Q1, just 48% of PE leaders felt confident in M&A decision-making. By Q4, that number was 86%. Something shifted.
What's driving the optimism:
PwC's 2026 outlook points to several converging factors. Interest rate cuts are making deal financing more accessible. Valuation gaps between buyers and sellers are narrowing. And there's a backlog of older portfolio companies that need to exit—PE firms hold more ageing investments than during prior cycles.
The Capstone Partners outlook frames it as a "gradual middle-market recovery." Private equity had five consecutive quarters of platform acquisition growth. Consumer sectors saw defensive dealmaking through 2025, but sponsors are now positioning for buy-and-build plays as conditions stabilise.
The seller signal:
79% of surveyed companies now view themselves as potential sellers, up from prior years. The top driver isn't growth exhaustion—it's valuation. Companies see current multiples as attractive relative to where they might be if conditions deteriorate.
Supply chain pressures are also pushing some founders toward exits. Reuters coverage notes that 22% of sellers cite rising material costs as a factor, while another 20% cite supply chain issues.
AI as a deal driver:
39% of PE firms expecting increased deal flow cite AI targets as a driver. The hunt for AI capabilities—or for companies that can be enhanced with AI—is reshaping how sponsors evaluate acquisition targets. If your business has a credible AI angle, that's worth articulating to potential buyers.
What this means for Build Mode founders:
If you're running a business in the $25M-$1B revenue range, the transaction environment is warming. The Citizens survey shows Q2 2026 emerging as the expected most active period—sponsors want to transact before political uncertainty around the midterm elections intensifies.
For buyers: refresh your acquisition pipeline now. Financing windows can open faster than diligence processes.
For sellers: "data room ready" discipline pays off when inbound interest arrives. Don't wait for the call to start preparing.
Secondaries Are No Longer a Niche Liquidity Tool
The secondaries market crossed a threshold this year that most founders haven't registered yet. It's not just growing—it's becoming the primary liquidity mechanism for private markets.
The numbers:
Jefferies' H1 2025 review shows $103 billion in secondary transaction volume alone in the first half of the year—a record. GP-led transactions hit $47 billion, up 68% year-over-year.
Dechert's 2026 Global PE Outlook surveyed PE managers and found that 46% are now using GP-led secondaries or continuation vehicles to manage distributions—nearly double the prior year's figure. Regional adoption is accelerating: 55% of APAC respondents and 51% of North American respondents plan to increase GP-led dealmaking over the next 24 months.
Blackstone's prediction: annual secondaries volume could reach $220 billion by year-end 2025 and $400 billion by 2030.
Why this matters for founders:
If you hold LP stakes in PE or VC funds, the secondary market is now a realistic liquidity path—not a fire-sale option. Average LP-led pricing has improved as buyers compete for quality assets.
If you're evaluating new fund commitments, the existence of a functioning secondary market changes how you should underwrite lockups. "What are the realistic liquidity paths?" is now a reasonable question to ask before committing capital.
And if you're building an investment office, secondaries can serve as a portfolio management tool for vintage control and rebalancing—not just opportunistic discount hunting.
Credit secondaries are expanding too:
The Ares $7.1 billion raise for credit secondaries signals that the playbook is spreading beyond traditional PE. Private credit assets have grown massively, and investors want liquidity options. Golub Capital just launched a GP-led secondaries strategy with over $1 billion in committed capital.
The trend is clear: liquidity in private markets is being industrialised. Lockups are becoming less binary. The founders who understand this will make better allocation decisions.
Family Office Benchmarks: What $2B AUM Looks Like
Mr Family Office's State of Family Offices 2026 survey landed this month with data points worth noting—especially if you're building something smaller and wondering what institutional behaviour looks like.
Key findings:
Average AUM sits around $2 billion. That's larger than most founders realise. Private equity remains the top allocation, followed by public equities and fixed income. The portfolio mix is less exotic than the press coverage suggests.
69% of surveyed offices are active in co-investments. This isn't a nice-to-have—it's becoming the default strategy for accessing deals with better economics than blind-pool fund commitments.
Geopolitical instability was cited as the top risk concern. Not interest rates, not inflation—geopolitics. Family offices are considering jurisdictional diversification not just for tax efficiency but also for resilience.
Nearly half expect to increase operating costs in 2025. They're building capability rather than relying solely on outsourcing. The "lean office, institutional habits" approach is winning over "minimal staff, maximum outsourcing."
What this means for a $20M founder:
You can't copy the headcount. But you can copy the behaviours.
Define a co-investment policy before your first hot deal arrives: ticket size, diligence requirements, concentration limits. The worst time to figure this out is when someone's pressuring you to wire money.
Map your portfolio into buckets—public, private, real, cash—and compare your allocation to institutional norms. You might be more concentrated than you think.
And consider governance seriously. The IQ-EQ predictions for 2026 highlight that family offices are formalising decision frameworks and succession pathways. Clarity on who makes decisions and how prevents friction later.
The Thread Connecting All of This
This week's developments share a common theme: optionality is being priced and productised.
The UK's FIG regime creates a time-limited residency option. Italy's flat tax is a subscription product for mobile wealth. M&A confidence creates exit optionality that didn't exist 18 months ago. Secondaries transform illiquid commitments into tradable positions.
The founders who thrive in this environment are the ones who see these as tools to be combined—not headlines to react to individually.
Residency is a capital strategy. Exits are windows, not endpoints. Liquidity is a product category. Build accordingly.
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