Uk To Uae Relocation Tax

---
name: uk-to-uae-relocation-tax
description: "What happens to UK tax when a UK resident moves to Dubai or Abu Dhabi, for tax year 2026/27 (6 April 2026 to 5 April 2027). Covers the Statutory Residence Test for leavers, split-year Cases 1 to 3, the 5-year temporary non-residence rule (including the 2026 change that catches the full amount of close-company distributions to material participators), what stays UK-taxed (rent, UK property gains, UK work, government pensions), the UK-UAE treaty pension article, the residence-based inheritance tax tail from 6 April 2025, voluntary National Insurance after the April 2026 changes, and a departure checklist. Trigger phrases: moving to Dubai, UK to UAE tax, leave UK for Dubai, 5-year rule Dubai, IHT tail UAE, UK pension in Dubai, split year Dubai. Out of scope, see siblings: the residence test in full (uk-statutory-residence-test), filing as a non-resident (uk-non-resident-sa109), foreign tax credit and withholding (uk-foreign-tax-and-withholding), the FIG regime (uk-non-dom), UAE corporate "
license: "AGPL-3.0-or-later (code) / OpenAccountants Guide License v1.0 (content)"
metadata:
  source: openaccountants
  openaccountants_url: "https://www.openaccountants.com/skills/uk-to-uae-relocation-tax"
  jurisdiction: "GB"
  tax_year: "2026"
  last_updated: "2026-10-23"
---

# Moving from the UK to the UAE: the tax corridor (2026/27)

Tax year in force: 2026/27 (6 April 2026 to 5 April 2027). Changelog v1.1 (2026-10-23): figures moved to 2026/27; temporary non-residence updated for the Finance Act 2026 change to close-company distributions; voluntary National Insurance abroad updated for the April 2026 changes; IHT tail table taken from IHTA 1984 s.6A; UAE section cut back to the one fact this skill relies on; unsourced figures removed; Sources table added. Review fixes (2026-10-23): close-company charge limited to material participators and their associates; the next-year non-residence condition added to the split-year cases.

**The corridor in one paragraph.** The UAE does not impose personal income tax (UAE Ministry of Finance). So almost every question on this move is a UK question: when you stop being UK resident, what the UK keeps taxing anyway, how long the UK inheritance tax tail follows you, and what happens if you come back within 5 years. Get the UK sequence right and the UAE end is mostly immigration and paperwork.

**Who this skill is for.** UK residents (employees, company owners, landlords, retirees) planning a genuine move to the UAE. It maps the rules and the traps. It is not advice on one person's facts.

## Part 1: Breaking UK residence

The full test is in `uk-statutory-residence-test`. The points that decide this corridor:

### 1.1 The automatic overseas tests (FA 2013 Sch 45)

| Test | Condition |
|---|---|
| First automatic overseas test | Fewer than **16 days** in the UK in the tax year (for someone UK resident in one or more of the previous 3 years) |
| Second automatic overseas test | Non-resident in all 3 previous years and fewer than 46 days in the UK (rarely relevant to a fresh leaver) |
| Third automatic overseas test: **full-time work abroad** | Overseas work averaging **35 hours a week** or more over the year, no significant break from overseas work, fewer than **91 days** in the UK and fewer than **31 days** with more than 3 hours of UK work |

The third test does the work on this corridor. Take a genuine full-time role in the UAE, keep UK days under 91 and UK work days under 31, and you are non-resident whatever your ties.

### 1.2 If no automatic test applies: the sufficient ties test

As a leaver (UK resident in one or more of the previous 3 tax years), five ties count:

1. **Family tie:** a spouse or partner, or a minor child, who is UK resident.
2. **Accommodation tie:** a place to live in the UK available for a continuous 91 days or more in the year, where you spend at least one night. At a close relative's home, you need 16 nights.
3. **Work tie:** 40 or more days with more than 3 hours of UK work.
4. **90-day tie:** more than 90 days in the UK in either or both of the previous two tax years. Every fresh leaver has it.
5. **Country tie:** the UK is the country where you were present at midnight most often in the year.

| UK days in the tax year | You are UK resident if you have |
|---|---|
| Fewer than 16 | Never (first automatic overseas test) |
| 16 to 45 | 4 or more ties |
| 46 to 90 | 3 or more ties |
| 91 to 120 | 2 or more ties |
| 121 to 182 | 1 or more ties |
| 183 or more | Always resident (first automatic UK test) |

**The practical read.** In the first years out you carry the 90-day tie. If your family or an available home stays in the UK, you are at 2 or 3 ties before anything else, which caps safe UK presence at 45 to 90 days. Count midnights and keep a log. Days spent in the UK because of exceptional circumstances beyond your control can be left out, up to 60 days a year (Sch 45 para 22).

### 1.3 Split-year treatment

You are resident for the whole year by default. Split-year treatment cuts the departure year into a UK part and an overseas part if you fit a leaver case. Every leaver case needs you to have been UK resident in the previous tax year and to be non-resident in the next one (Sch 45 paras 44 to 46):

- **Case 1, starting full-time work overseas.** The split runs from the day overseas full-time work starts. The UK day limit (90) and UK work-day limit (30) for the rest of the year are reduced in proportion to the whole months before the work starts. The next tax year must be non-resident because you meet the third automatic overseas test for it.
- **Case 2, partner of a Case 1 leaver.** You go with a partner who qualifies under Case 1.
- **Case 3, ceasing to have any UK home.** You stop having any UK home, spend fewer than 16 days in the UK in the rest of the year, and within 6 months you are resident in the new country under its law, present there every day, or your only home is there.

From the split date, foreign income such as a UAE salary is outside UK tax. UK salary before the split stays taxed through PAYE. Decide which case you rely on before you book flights or exchange contracts, and make the diary match it.

## Part 2: The 5-year trap (temporary non-residence)

You are temporarily non-resident if you had sole UK residence in **4 or more of the 7 tax years** before the year you leave and your non-residence lasts **5 years or less** (FA 2013 Sch 45 para 110; RDR3). If so, these are taxed **in the year you return**:

- **Capital gains** on assets you owned before you left and sold while away (TCGA 1992 s.10A; HMRC helpsheet HS278).
- **Close-company dividends and distributions** received while away, where at any time in the departure tax year (its UK part, if split) or the 3 tax years before it you were a material participator in the company or an associate of one. Overseas companies that would be close if UK resident count too. For individuals returning on or after 6 April 2026, the charge applies to the **full amount** of every such distribution: the old exclusion for post-departure trade profits is gone (ITTOIA 2005 ss.401C, 408A and 413A as amended by Finance Act 2026 Sch 3 Part 3, paras 19 to 21; HMRC manual RFIG21600). Paying out company reserves "tax-free in Dubai" and coming home in year 4 is now caught in full.
- Some other listed income (see RDR3 and the RFIG manual).

Foreign tax paid on a caught distribution can now be credited against the UK charge (FA 2026 Sch 3 Part 3). Income that simply arises while you are away, such as a UAE salary, is not pulled back.

**The planning statement.** Selling a business or emptying company reserves while in the UAE gives a permanent UK saving only if non-residence lasts **more than 5 years**. If a return within 5 years is realistic, price the deferred UK bill into every decision.

**Coming back after a long absence.** Someone who returns after at least 10 consecutive tax years of non-residence can claim the 4-year foreign income and gains (FIG) regime that replaced the remittance basis from 6 April 2025. It cannot be claimed for a year in which you are temporarily non-resident. See `uk-non-dom`.

## Part 3: What stays UK-taxed wherever you live

Non-residence ends UK tax on foreign income and gains. It does not end UK tax on UK-source items. Filing detail is in `uk-non-resident-sa109`.

### 3.1 UK rental property
- Rental profits stay UK-taxable. You file Self Assessment as a non-resident landlord.
- **Non-resident Landlord Scheme:** a letting agent, or a tenant paying more than **£100 a week** with no agent, must deduct basic rate tax from the rent unless HMRC has approved you to receive it gross. Individuals apply on form **NRL1**. Apply before the first rent you receive as a non-resident.
- A non-resident who is a UK national can claim the Personal Allowance (£12,570 for 2026/27), so a modest rental profit often produces little or no tax. The filing obligation stays.

### 3.2 UK land and property gains
- Non-residents are taxed on gains on all UK land and property, and on indirect disposals of "property-rich" entities (75% or more of gross value from UK land, where you hold 25% or more).
- Every disposal needs a UK property return and payment within **60 days** of completion, even when no tax is due or there is a loss.
- CGT rates for 2026/27: **18%** on gains within the basic rate band, **24%** above it. Annual exempt amount £3,000.

### 3.3 UK dividends and interest
Limited to tax deducted at source for most non-residents under the disregarded income rule (ITA 2007 s.811), at the price of the Personal Allowance in that computation. See `uk-non-resident-sa109` for the comparison. The close-company dividend trap in Part 2 still applies.

### 3.4 UK pensions
- **Private and workplace pensions:** Article 17 of the 2016 UK-UAE Double Taxation Convention says pensions paid to a resident of one state are **taxable only in that state**. A UAE resident's UK private pension is therefore taxable only in the UAE, which has no personal income tax.
- The relief is not automatic. You claim on form **DT-Individual**, and HMRC then tells the pension payer to stop deducting tax. Until then PAYE applies and you reclaim.
- **Government service pensions** (Article 18(2)) stay taxable only in the UK unless you are both resident in and a national of the UAE.
- **State Pension:** paid abroad, but it only rises each year in the EEA, Gibraltar, Switzerland or a country with a UK social security agreement. The UAE is none of these, so a UAE resident's State Pension is frozen at the rate when they left or first claimed.

### 3.5 UK work
Days physically worked in the UK give UK-taxable earnings even for a non-resident, subject to treaty relief. Keep UK work days below the SRT limits and expect them to carry their own tax.

## Part 4: The UAE end

The UAE does not impose personal income tax (UAE Ministry of Finance). That is the only UAE rule this skill relies on. UAE corporate tax for anyone running a business, UAE VAT, UAE tax residence and the UAE tax residency certificate are outside this skill: ask a UAE adviser. The UK-UAE convention's residence article (Article 4) decides whether you count as a UAE resident for the treaty claims in Part 3.4.

## Part 5: Inheritance tax: the tail

Since **6 April 2025**, UK inheritance tax follows residence, not domicile (IHTA 1984 s.6A).

- You are a **long-term UK resident**, with your worldwide estate in UK IHT, if you were UK resident in at least **10 of the previous 20 tax years**.
- After you leave, that status continues for a tail that depends on how many of the last 20 years you were resident:

| UK-resident years out of the last 20 | Tail after leaving (tax years) |
|---|---|
| 13 or fewer | 3 |
| 14 | 4 |
| 15 | 5 |
| 16 | 6 |
| 17 | 7 |
| 18 | 8 |
| 19 | 9 |
| 20 | 10 |

- UK-situated assets (UK property, most UK accounts and shares) stay in UK IHT whatever your residence.

**On this corridor:** a lifelong UK resident who moves to Dubai at 45 stays in UK IHT on their worldwide estate for 10 tax years. The UAE position changes nothing during the tail. The SRT day log from Part 1 is also the IHT evidence.

## Part 6: The departure checklist

**The tax year before you leave**
1. Decide which SRT route (third automatic overseas test or the ties table) and which split-year case you rely on. Write it down and build the diary around it.
2. Model the 5-year rule against every planned disposal or dividend. If a company sale is coming, decide whether it happens before departure (CGT with Business Asset Disposal Relief at **18%** for 2026/27 on up to £1 million of lifetime gains, 24% above) or after more than 5 full years away.
3. Landlords: tell the agent and file **NRL1**.
4. Start the visa process.

**Departure year**
5. Log every UK midnight from day one.
6. File **P85** (or report the departure on your Self Assessment return).
7. Complete the **SA109** residence pages with the split-year claim.
8. **Voluntary National Insurance.** From 2026/27, voluntary Class 2 for periods abroad is no longer available to most people. Class 3 costs **£18.40 a week** for 2026/27. New applications to pay Class 3 for periods abroad need 10 continuous years of UK residence or 10 qualifying years on the record. Existing Class 2 payers abroad who apply to switch to Class 3 before 6 April 2027 keep the old 3-year test.
9. Tell the Student Loans Company. Repayments continue abroad.
10. **ISAs:** existing ISAs keep their tax treatment, but you cannot pay in while non-resident (unless a Crown employee or their spouse).

**First UAE year**
11. File **DT-Individual** for pension treaty relief and follow up until the payer stops deducting tax.
12. Diarise each year: UK Self Assessment (if UK income remains), a day-count review each 5 April, the 5-year anniversary and the IHT tail end-date.

## Part 7: Worked examples

**7.1 The employee (Case 1).** Priya, a London employee, starts a full-time Dubai role on 1 September 2026. Under Case 1 the split runs from 1 September: her UK salary from 6 April to 31 August 2026 is taxed through PAYE, and her UAE salary from 1 September is outside UK tax, provided she keeps within the reduced UK day and work-day limits for the rest of 2026/27 and meets the third automatic overseas test for 2027/28. UAE personal income tax: none. UK filings: P85 and a 2026/27 return with SA109. If she keeps her London flat available rather than letting it, she carries the accommodation tie into later years. That is fine while the third automatic overseas test holds and risky the year it fails.

**7.2 The company owner (the 5-year rule, priced).** Dan, a higher-rate taxpayer, owns all of a trading company and expects to sell it for a £2,000,000 gain. If he sells while UK resident in 2026/27, the first £1,000,000 qualifies for BADR at 18%. The annual exempt amount (£3,000) goes against the gain taxed at 24%. UK CGT is £419,280. If he moves to Dubai first, sells in year 2 and stays away more than 5 full years, there is no UK CGT (the shares are not UK land) and no UAE personal tax. If he returns in year 4, the whole gain is taxed in the year he comes back, at the rates then in force. The same applies to paying out reserves as dividends while away: from 6 April 2026 every such distribution is caught if he returns within 5 years.

```oa-check
name: CGT on a GBP 2,000,000 company sale while UK resident (2026/27)
inputs:
  gain: 2000000
  badr_limit: 1000000
  badr_rate_pct: 18
  main_rate_pct: 24
  annual_exempt: 3000
steps:
  - badr_tax: badr_limit * badr_rate_pct / 100
  - other_gain: gain - badr_limit - annual_exempt
  - other_tax: other_gain * main_rate_pct / 100
  - total_cgt: badr_tax + other_tax
expected:
  badr_tax: 180000.00
  other_gain: 997000.00
  other_tax: 239280.00
  total_cgt: 419280.00
```

**7.3 The landlord-retiree (the treaty at work).** Margaret, a UK national aged 62, moves to Abu Dhabi. She keeps a Manchester flat (£12,000 profit) and draws £40,000 a year of taxable income from her personal pension. Once her DT-Individual claim is processed, Article 17 makes the pension taxable only in the UAE, so it is paid gross. The rental profit stays UK-taxable, but as a UK national she keeps the £12,570 Personal Allowance, so her 2026/27 UK tax is nil. Had she stayed in the UK, the £52,000 would have cost £8,232 of income tax at 2026/27 rates. Her watch items: the frozen State Pension, the IHT tail, and the 60-day return when she sells the flat.

```oa-check
name: UK tax on GBP 52,000 if she stayed, versus rent only as a UAE resident (2026/27)
inputs:
  pension: 40000
  rent_profit: 12000
  personal_allowance: 12570
  basic_band: 37700
steps:
  - total_income: pension + rent_profit
  - taxable_if_stayed: total_income - personal_allowance
  - basic_tax: min(taxable_if_stayed, basic_band) * 0.20
  - higher_tax: max(taxable_if_stayed - basic_band, 0) * 0.40
  - tax_if_stayed: basic_tax + higher_tax
  - taxable_as_uae_resident: max(rent_profit - personal_allowance, 0)
  - tax_as_uae_resident: taxable_as_uae_resident * 0.20
expected:
  total_income: 52000.00
  tax_if_stayed: 8232.00
  tax_as_uae_resident: 0.00
```

## Part 8: The trap list

| Trap | Why it bites |
|---|---|
| Counting days like a tourist | The SRT counts midnights, and leavers' limits are far below 183. The 90-day tie means last year's habits raise this year's bar. |
| Keeping a home "just in case" | An available UK home used one night is an accommodation tie; a close relative's home needs 16 nights. |
| Family staying behind "for school" | A UK-resident spouse or minor child is a family tie, and school holidays add UK days. |
| Paying out reserves in year 1, returning in year 4 | From 6 April 2026 the 5-year rule taxes the full amount of every close-company distribution a material participator received while away, in the year of return. |
| Assuming the pension is paid gross automatically | Treaty relief needs a processed DT-Individual claim. Until then PAYE continues. |
| Forgetting IHT | The tail runs 3 to 10 tax years after leaving, and UK assets stay in IHT forever. |
| The 60-day property return | Selling the old UK home after leaving needs a return within 60 days even if relief removes the tax. |
| Planning on voluntary Class 2 | Gone for periods abroad from 2026/27 for most people. Class 3 is £18.40 a week, and new applicants need 10 years. |

## Sources

| Source | URL | Read on |
|---|---|---|
| Finance Act 2013 Sch 45 (statutory residence test, split year, temporary non-residence) | https://www.legislation.gov.uk/ukpga/2013/29/schedule/45 | 2026-10-23 |
| HMRC RDR3, Statutory Residence Test guidance note | https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt/guidance-note-for-statutory-residence-test-srt-rdr3 | 2026-10-23 |
| Finance Act 2026 Sch 3 (Part 3, temporary non-residence) | https://www.legislation.gov.uk/ukpga/2026/11/schedule/3 | 2026-10-23 |
| HMRC RFIG21600, temporary non-residence: close company distributions | https://www.gov.uk/hmrc-internal-manuals/residence-and-fig-regime-manual/rfig21600 | 2026-10-23 |
| HMRC HS278, Temporary non-residents and Capital Gains Tax (2026) | https://www.gov.uk/government/publications/temporary-non-residents-and-capital-gains-tax-hs278-self-assessment-helpsheet/hs278-temporary-non-residents-and-capital-gains-tax-2026 | 2026-10-23 |
| GOV.UK, 4-year FIG regime eligibility | https://www.gov.uk/guidance/check-if-you-can-claim-the-4-year-foreign-income-and-gains-regime | 2026-10-23 |
| GOV.UK, Paying tax on rent to landlords abroad | https://www.gov.uk/guidance/paying-tax-on-rent-to-landlords-abroad | 2026-10-23 |
| GOV.UK, Apply as an individual to receive UK rental income without tax deducted (NRL1) | https://www.gov.uk/guidance/apply-as-an-individual-to-receive-uk-rental-income-without-uk-tax-deducted | 2026-10-23 |
| GOV.UK, Capital Gains Tax for non-residents: UK property (60 days, property-rich) | https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-uk-residential-property | 2026-10-23 |
| GOV.UK, Capital Gains Tax rates (18%, 24%, BADR 18%) | https://www.gov.uk/capital-gains-tax/rates | 2026-10-23 |
| HMRC HS275, Business Asset Disposal Relief (2026) (GBP 1 million limit) | https://www.gov.uk/government/publications/entrepreneurs-relief-hs275-self-assessment-helpsheet/hs275-business-asset-disposal-relief-2026 | 2026-10-23 |
| GOV.UK, Income Tax rates and Personal Allowance 2026/27 | https://www.gov.uk/income-tax-rates | 2026-10-23 |
| UK-UAE Double Taxation Convention 2016 (Articles 4, 13, 17, 18) | https://www.gov.uk/government/publications/united-arab-emirates-tax-treaties/2016-uk-uae-double-taxation-convention | 2026-10-23 |
| GOV.UK, Form DT-Individual | https://www.gov.uk/government/publications/double-taxation-treaty-relief-form-dt-individual | 2026-10-23 |
| GOV.UK, State Pension if you retire abroad: rates | https://www.gov.uk/state-pension-if-you-retire-abroad/rates-of-state-pension | 2026-10-23 |
| GOV.UK, Voluntary National Insurance abroad from 6 April 2026 | https://www.gov.uk/government/publications/voluntary-national-insurance-contributions-for-periods-abroad-from-6-april-2026/voluntary-national-insurance-contributions-abroad-from-6-april-2026 | 2026-10-23 |
| GOV.UK, Voluntary National Insurance rates (Class 3 GBP 18.40) | https://www.gov.uk/voluntary-national-insurance-contributions/rates | 2026-10-23 |
| GOV.UK, Individual Savings Accounts (non-residents) | https://www.gov.uk/individual-savings-accounts | 2026-10-23 |
| Inheritance Tax Act 1984 s.6A (long-term UK resident, tail table) | https://www.legislation.gov.uk/ukpga/1984/51/section/6A | 2026-10-23 |
| HMRC IHTM47020, long-term UK residence test | https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm47020 | 2026-10-23 |
| UAE Ministry of Finance, Retail T-Sukuk ("The United Arab Emirates does not impose personal income tax") | https://mof.gov.ae/en/public-finance/public-debt/retail-t-sukuk/ | 2026-10-23 |

Not yet confirmed: whether HMRC requires the UAE authority to certify residence on the DT-Individual claim (the form page read on 2026-10-23 does not say); the full list of "other listed income" caught by temporary non-residence beyond gains and close-company distributions.

## Today's figures and who stands behind this skill

This file is an AI skill (tax rules your AI follows) from OpenAccountants, copied on 2026-10-23. Rates, thresholds and deadlines change. For the current version of this skill, its official sources and the named accountant (if any) who stands behind it, call `get_skill` with slug `uk-to-uae-relocation-tax` on the OpenAccountants connector (https://www.openaccountants.com/connect), or read https://www.openaccountants.com/skills/uk-to-uae-relocation-tax. If neither is available, confirm every figure against the official source pages cited above before relying on it.