High-net-worth British nationals residing in the United Arab Emirates and other Gulf states are leaving the region to escape missile and drone attacks, but are choosing destinations such as Ireland and France rather than returning to the UK to avoid triggering tax liabilities, according to tax advisers.
With only about three weeks left in the current financial year, many overseas residents have already used up their permitted days in the UK without incurring tax. Some are seeking guidance from HM Revenue and Customs on whether they would be granted an extra 60 days under an “exceptional circumstances” provision, similar to that applied during the Covid-19 pandemic. However, tax experts warn that HMRC is unlikely to be sympathetic.
Nimesh Shah, chief executive of advisory firm Blick Rothenberg, said he had received a disproportionate number of calls from people wanting to leave the UAE. “I’ve told them not to rely on any exceptional circumstances provisions from HMRC,” he said. “In HMRC’s mind they’ve chosen to go there to not pay tax in the UK. They’re not going to give you a green light to spend more time here and not pay tax.”
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 businesses sold during their absence. One wealthy business owner told the Guardian he was staying in Dublin until after 5 April, the end of the 2025-26 tax year, to avoid capital gains tax on a business sold years ago. Another said they would spend time in France.
The number of days an individual can stay in the UK without becoming tax resident depends on several tests, including ties such as accommodation, a spouse or children. For some, the limit is as low as 45 days. During the pandemic, HMRC allowed a 60-day exceptional circumstance provision for those who could prove they could not leave due to travel shutdowns. But this is unlikely to apply now, as the Foreign Office advice for affected countries is “all but essential travel”, not “no travel” at all.
David Little, a partner at Evelyn Partners, warned that even a few extra days in Britain could have major consequences, with worldwide income and investment gains becoming taxable. He added that a return could retrospectively trigger taxation on gains from assets sold years ago.
