Wealthy British nationals fleeing the conflict in the Gulf are choosing to take refuge in Ireland and France rather than returning to the UK, in order to avoid hefty tax bills, according to tax advisers. With only about three weeks left in the current financial year, many high-net-worth individuals who had been living in the United Arab Emirates and neighbouring countries have already used up their permitted days in Britain without incurring tax liabilities.
Some are seeking guidance from HM Revenue and Customs on whether they would be granted an additional 60 days under an “exceptional circumstances” provision, but experts warn this is unlikely to apply. Nimesh Shah, chief executive of advisory firm Blick Rothenberg, said: “I’ve had a disproportionate number of calls from people wanting to leave the UAE in recent weeks. I’ve told them not to rely on any exceptional circumstances provisions from HMRC. I can’t imagine HMRC are very sympathetic here.”
For those who have been non-resident for fewer than five years, returning to the UK could also trigger capital gains tax on any assets or business sold during their absence. One very wealthy business owner told the Guardian he was staying in Dublin until after 5 April, when the 2025-26 tax year ends. “I’m happy to pay income tax and tax on investments next tax year, but I don’t want the sale of a business that I sold years ago to fall within UK capital gains tax,” he said.
Another British UAE-based business owner said they would spend time in France for now. The number of days an individual can stay in the UK without becoming tax resident depends on tests measuring their ties to the UK, such as having accommodation, a spouse or children in the country. For many, this can be as few as 45 days.
During the Covid-19 pandemic, HMRC allowed some people to overspend their allowance under a 60-day exceptional circumstance provision, but only if they could prove they could not leave due to travel shutdowns. Tax advisers say this is unlikely to apply now, as the UK government’s travel advice for affected countries like Bahrain is “against all but essential travel”, not “no travel” as required by HMRC guidelines.
David Little, a partner at wealth management firm Evelyn Partners, said: “Even a few extra days in Britain can have major consequences,” with worldwide income and investment gains potentially becoming taxable. He added that for those who left and sold assets, a return could trigger a tax liability on gains from years ago.
