Caught between the UK and Dubai: Tax guidance

With the current events taking place in Dubai, the plans of those looking to move to, or back from the UAE, are rapidly changing. We are hearing from many clients that were moving to the middle-east this month that are now potentially being delayed and clients that are now considering coming back for a period of time or delaying their move. All scenarios have tax implications that they were trying to avoid. 

Here are a few key elements to consider right now 

If people are delayed in leaving the UK, they may need to rely on split-year treatment, provided they meet one of the three qualifying cases:

Case one — Starting fulltime work overseas 

To rely on this: 

• You must work fulltime overseas, generally averaging 35 hours per week. 
• UK visits must be limited and cannot include significant UK work. 
• You must meet the “overseas work pattern” test, which HMRC applies strictly. 

Case two — Partner of an individual starting fulltime work overseas 

You may qualify only if: 

• Your partner meets all the fulltime overseas tests. 
• You move abroad with them. 
• Remaining UK ties do not pull you back into residency. 

Case three — Ceasing to have a UK home 

This requires: 

• Your UK home to genuinely cease being available for your use. 
• A sufficient period where the property is not accessible to you. 
• Careful evidence — retaining a home for rental can still cause UK ties. 

Some taxpayers may not meet any of these cases and if they stay in the UK for longer than expected e.g. leave in July, they could be tax resident for the whole of 26/27. 

Statutory Residence Test

When it comes to the UK Statutory Residence Test, the biggest risk for individuals is simply slipping up on their day count. If you breach the limits under the Automatic Overseas Test or the wider Statutory Residence Test, you can very easily end up being treated as UK resident for the whole tax year, even if that wasn’t your intention. 

Temporary Non Residence Rules

Once you fall back into UK residence, you also need to be mindful of the Temporary Non Residence (TNR) rules. These rules are deliberately tough and apply when an individual is non-resident for fewer than five full UK tax years. 

If triggered, they can pull certain overseas income and gains back into UK tax. This can include and not limited to: 

• Company share disposals. 
• Property disposals. 
• Dividends from “close” companies. 
• Certain trust distributions. 

A common misconception is around exceptional circumstances. HMRC takes an extremely narrow view of what counts. Simply leaving another country because of a situation there and returning to the UK won’t normally qualify.  

In HMRC’s eyes, exceptional circumstances only really apply when you are already in the UK, and something genuinely outside your control prevents you from leaving. That’s a very high bar, and HMRC sticks to it. 

In short: 

• UK day counting must be monitored carefully. 
• Falling back into UK residence can trigger the TNR rules, bringing income and gains back into tax. 
• HMRC rarely accepts exceptional circumstances unless an unforeseen event physically stops you leaving the UK. 

 Pre-return tax planning: Steps to take before you come back 

To minimise tax exposure, consider: 

• Crystallising offshore gains before returning to the UK. 
• Drawing dividends or profits while still non-resident. 
• Reviewing whether to sell investments or property prior to UK residency. 
• Planning the order of closing or restructuring offshore accounts. 
• Reviewing pension withdrawal timing. 
• Reviewing your UK ties to prevent accidental residency. 
• Keeping meticulous day-count evidence (use travel apps or logs). 

A structured plan can often reduce or eliminate unintended tax liabilities. 

How can Gerald Edelman help? 

Navigating the UK tax system can be complex, and consulting a tax specialist can provide clarity. We can help optimise your tax position and ensure full compliance with UK regulations. 

If you’re unsure about the implications of moving back to the UK and would like further advice, please contact our team by submitting a form, or emailing our Tax Partner, Amal Shah or International Tax Partner, Sonal Shah.