Cross-Border Relocation Between the UK and UAE: What Private Clients Need to Know in 2026

The pathway between the United Kingdom and the United Arab Emirates has become one of the most travelled routes for international families seeking new opportunities. With Dubai alone hosting approximately 240,000 British residents and the UAE attracting an estimated 9,800 new millionaires in 2025, this cross-border movement represents more than just geographic relocation: it's a fundamental shift in how families approach taxation, education, and lifestyle planning.

Cross-Border Relocation Between the UK and UAE

However, beneath the appeal of year-round sunshine and tax-free living lies a complex web of legal, financial, and practical considerations that require careful navigation. The UK's recent abolition of the non-domiciled regime, the uncertainties of new UK tax policies  and the UAE's evolving legal frameworks mean that 2026 presents both unprecedented opportunities and significant pitfalls for relocating to the UAE.

The New Reality: End of the Non-Dom Era

April 2025 marked a watershed moment in UK tax policy with the effective abolition of the non-domiciled regime. For decades, this system allowed individuals with foreign domicile to pay UK tax only on UK income and foreign income brought into the country. That world has fundamentally changed.

Under the new rules, all UK residents face taxation on worldwide income and gains, regardless of domicile status. While a limited four-year exemption exists for newcomers who have been non-UK resident for at least ten years, this transitional relief is temporary and comes with strict conditions.

The implications extend beyond annual tax bills. The UK is simultaneously moving toward a residence-based inheritance tax system, where individuals become subject to UK inheritance tax after ten years of residence in the previous twenty years: and crucially, remain potentially liable for ten years after leaving.

This creates what tax professionals call the "inheritance tax shadow," where even families successfully established in Dubai may find their worldwide estates subject to UK inheritance tax for years after departure.

The Five-Year Shadow and Residence Challenges

UK tax residence operates under the Statutory Residence Test (SRT), a complex framework combining day counting with connecting factors or "ties." For individuals considering Dubai residency, several factors commonly create unexpected residence complications:

• Maintaining a family home in the UK "for visits"

• Children remaining in British schools while parents relocate

• Continuing UK business activities or director roles

• Family members splitting time between jurisdictions
  

Even families who successfully achieve non-resident status face the temporary non-residence rules: a five-year period during which certain gains realized while abroad can become taxable upon return to the UK. This "shadow period" affects asset disposals, investment restructuring, and long-term financial planning.

Additionally, a potential exit tax may be included in the new UK budget. Still to be seen.

The practical impact is significant: families often discover that their intended "clean break" from the UK tax system becomes a prolonged process requiring sustained evidence of genuine relocation.

UK-UAE Double Tax Treaty: Helpful but Limited

The 2016 UK-UAE Double Tax Treaty provides important protections for genuine cases of dual residence, offering tie-breaker rules based on permanent home location, center of vital interests, and habitual residence. However, the treaty's protection is narrower than many families assume.

Crucially, the treaty does not cover inheritance tax: leaving UK-domiciled individuals exposed to UK inheritance tax on worldwide assets regardless of their UAE residence status. Additionally, the treaty cannot override UK domestic residence rules where families maintain substantial UK connections. The treaty works best when supporting clear-cut cases: where families have genuinely relocated their life center to the UAE, severed most UK ties, and can demonstrate through their actions that the UAE has become their primary home.

UAE Family Law and Succession: Navigation Beyond Tax

The UAE's legal system presents unique challenges for international families, operating under a dual framework combining Islamic law principles with adaptations for its diverse expatriate population.

For succession planning, the default position applies Islamic inheritance law, which provides fixed shares for family members and limits testamentary freedom to typically one-third of an estate. However, the UAE has created alternatives:

• DIFC and ADGM Wills: Allow non-Muslims to establish common law-style succession planning

• Civil Family Courts: Enable non-Muslims to opt into civil law frameworks in Abu Dhabi and Dubai

• Sharia-Compliant Structures: Provide Islamic law-compliant planning for Muslim families

The critical requirement is coordination. Families commonly create DIFC or ADGM wills for UAE assets while maintaining UK wills for British property and investments. Without proper alignment, estates can become trapped between competing legal systems, creating delays, costs, and family disputes.

Practical Planning Framework

Successful UK-UAE relocation requires systematic attention to multiple interconnected areas:

Residence and Domicile Management

Clients must document their genuine intention to relocate through consistent actions: obtaining UAE residence permits, establishing primary homes, transferring business activities, and severing UK ties where possible. Half-measures: maintaining full UK homes "just in case" or keeping children in UK schools indefinitely: often undermine residence positions.

Exit and Re-Entry Strategy

The five-year temporary non-residence rules require careful timing of asset disposals and restructuring. Families should complete major transactions either before leaving the UK or after establishing clear non-residence, avoiding the complex overlap period.

Succession Coordination

UAE and UK succession planning must work in harmony. This typically involves:

• Registering appropriate UAE wills (DIFC/ADGM for non-Muslims)

• Ensuring UK wills complement rather than contradict UAE arrangements

• Planning for UK inheritance tax exposure on worldwide assets

• Establishing guardianship arrangements for minor children in both jurisdictions
  

Compliance Documentation

Both jurisdictions require ongoing compliance and record-keeping. UAE residency must be maintained through physical presence and permit renewals, while UK obligations may continue for former residents through various reporting requirements and anti-avoidance rules.

The Professional Services Imperative

International families often underestimate the complexity of cross-border relocation, viewing it as a straightforward change of address rather than a comprehensive legal and financial restructuring. The consequences of inadequate planning include:

• Unexpected UK tax liabilities arising from maintained residence

• UAE succession difficulties due to conflicting wills or inadequate legal frameworks

• Double taxation on investment income and gains

• Inheritance tax exposure on worldwide assets despite UAE residence
  

Professional guidance becomes essential not just for initial relocation but for ongoing compliance and optimization. Tax laws, residence rules, and bilateral treaties evolve continuously, requiring regular review and adjustment of family structures.

Structure Over Escape: A Strategic Approach

The UK-UAE corridor offers genuine opportunities for international families: tax efficiency, lifestyle enhancement, and global connectivity. However, these benefits materialize only when relocation is approached as comprehensive strategy rather than geographic escape.

Successful families understand that international relocation involves restructuring their entire legal and financial identity. This means:

• Planning Rather Than Reacting: Developing multi-year strategies that account for UK exit rules, UAE establishment requirements, and family objectives

• Documentation Over Assumptions: Creating clear evidence trails supporting residence claims and succession plans

• Coordination Across Disciplines: Integrating tax, legal, and family considerations into coherent structures

The clients  who thrive in the UK-UAE corridor are those who recognize that international mobility is not about escaping one system for another, but about consciously choosing and structuring their legal and financial lives to align with their genuine circumstances and long-term objectives.

In an era where both the UK and UAE are refining their approaches to international residents, professional guidance and systematic planning have become not luxuries but necessities for families seeking to optimize their international arrangements while maintaining legal certainty and family security.

For families considering or currently navigating UK-UAE relocation, G37 Chambers in Dubai provides comprehensive guidance on the tax, legal, and practical aspects of international mobility. Our cross-border expertise helps ensure that your family's relocation strategy delivers the intended benefits while maintaining compliance and security across both jurisdictions.

Fernando Del Canto

Barrister | Abogado