Relocating Abroad? Stay Ahead of UK Tax Rules Before You Go
15th December, 2025
With more UK residents choosing to move to destinations such as Dubai and Abu Dhabi, we wanted to share some key points about the tax implications to keep in mind.
Why the UAE Appeals
Many people are attracted to the UAE for its strong healthcare, reliable safety, and high standard of living.
The main draw, however, is its tax environment.
There is no personal income tax, no capital gains tax for individuals, and no local inheritance tax in most emirates. While this can be appealing, it is important to plan carefully so that your tax position is structured correctly before you leave the UK.
UK Tax Status and Residency
Your liability to UK tax depends primarily on your position under HMRC’s Statutory Residence Test.
This looks at the number of days you spend in the UK and factors such as your family, home, and work connections.
If you become non-UK resident, your overseas income and gains may fall outside the UK tax net. However, UK-sourced income and certain UK assets can still be taxed in the UK. For example, rental income from a UK property remains taxable and must be reported through a Self Assessment return, even if you live abroad.
Capital Gains Tax on UK Assets
If you are non-UK resident and sell UK property or land, you must report the disposal to HMRC within 60 days of completion under the Non-Resident Capital Gains Tax rules.
From 6 April 2025, the annual CGT exemption will be reduced to £3,000. The main rates from that date are:
- 18% for basic-rate taxpayers, where the gain falls within the basic band
- 24% for higher-rate taxpayers
- 32% on carried interest gains
If you sell shares in a UK property-rich company, where at least 75% of its gross asset value relates to UK property, you may still face UK CGT even if you are non-resident.
Returning to the UK and Temporary Non-Residence
If you leave the UK but return within a few years, you may be affected by the temporary non-residence rules. In this case, gains made while abroad could become taxable once you are back in the UK.
Spending at least five full tax years abroad is often seen as an important milestone for breaking UK tax on certain income and gains, but each case depends on individual circumstances.
Inheritance Tax Considerations
Even if you become a resident in the UAE, UK Inheritance Tax can still apply to your UK-based assets, such as property or bank accounts.
From 6 April 2025, the Inheritance Tax rules will be based on residence rather than domicile.
Anyone who has been UK tax resident for at least ten of the previous twenty years will be treated as a long-term UK resident. Once that applies, your worldwide assets may fall within the UK Inheritance Tax scope.
If you later move abroad, your non-UK assets can remain within the UK Inheritance Tax net for up to ten years after leaving, depending on how long you were resident before your departure.
In Summary
Relocating abroad is never the same for everyone. Each person’s tax position depends on a mix of residence status, income sources, property, pensions, and timing.
We are happy to offer tailored advice to help you plan your move in a way that protects your position and keeps the process simple and stress-free.
If you are thinking about relocating and would like to talk through your situation, please get in touch.
