UK Residency in Dubai: Ceasing Liability for UK Tax for Expats

Overview

Many wealthy British individuals are taking the decision to relocate from the United Kingdom (UK) to Dubai, often driven by the lifestyle and significant tax advantages. However, breaking UK tax residency is not always clear-cut, particularly for individuals who wish to continue to spend time in the UK.

Definitions

CGT: Capital gains tax.
GWR: Gift with reservation.
IHT: Inheritance tax.
SRT: Statutory residence test.
UK: United Kingdom.

Practical Guidance

Statutory residence test

To become a non-UK tax resident, individuals must consider the statutory residence test (SRT). The SRT is a series of tests that determines whether an individual is a UK tax resident based on both time spent in the UK and other links to the UK.

There are three parts to the test which must be considered strictly, in a specific order, for each tax year, as follows:

The automatic overseas tests.
The automatic residence tests.
The sufficient ties test.