How to Optimise Your Finances When Moving to Dubai From the UK

This guide covers the visa requirements and tax rules UK expats should be aware of before moving to Dubai. Additionally, it explores banking, insurance, and investment options available to those relocating to the UAE.

What Are the Visa Requirements for a UK Citizen Moving to Dubai?

UK citizens who want to move to Dubai must obtain one of the following available visas:

1. Work visa
2. Remote work visa
3. Green visa
4. Golden visa

If you’re moving to Dubai from the UK for work, the UAE offers a renewable work visa that allows you to live in Dubai for up to two years. To secure a work visa, you must be sponsored by an employer based in the UAE.

In case you work remotely, the UAE’s remote work visa enables you to live and work in Dubai for up to a year, as long as you meet specific requirements, such as:

• Being employed remotely outside of the UAE.
• Earning an income of at least AED 12,856 per month (approximately USD 3,500 or around £2,600), as required under the UAE’s Virtual Working Programme.
• Securing health insurance coverage for the duration of your stay in the UAE.

Similarly, you may be able to obtain a five-year Green visa if one of these two conditions applies:

1. You’re a freelancer or a self-employed individual: You may qualify if your annual income was AED 360,000 in the previous two years and you hold a bachelor’s degree or a specialised diploma.
2. You’re considered a skilled employee in the UAE: You’re eligible if your monthly income is at least AED 15,000 and you’re employed in a specified field, including technology, science, or writing.

Which UAE Visa Allows Moving to Dubai From the UK Without a Job?

The UAE’s Golden visa allows investors and entrepreneurs to move from the UK to Dubai if they meet specific criteria. The following conditions apply depending on the type of assets you invest in:

Health insurance coverage is also required under the Golden visa rules, and UK nationals moving to Dubai with their family must obtain coverage for each family member.

What Are the Tax Implications of Moving From the UK to Dubai?

The UAE is a zero-tax jurisdiction, meaning it doesn’t impose tax on personal income, capital gains, inheritance, and rent, regardless of your residency. Therefore, transitioning from the UK to UAE tax residency will result in significantly reduced tax liabilities.

Unlike UK residents, who are liable for tax on their worldwide income, UK non-residents are only subject to tax on income sourced within the UK. You are a UK non-resident if one of the following applies:

• You spent less than 16 days in the UK in a tax year.
• You were in the UK for fewer than 46 days in a tax year and have not been a UK resident for the prior three tax years.
• You were employed abroad full-time, working at least 35 hours a week, and spent less than 91 days in the UK while working for no more than 30 days during that period.

Some of the income and gains you have accrued while you were a UK non-resident can be taxed in the UK if you’re considered a temporary non-resident in the UK. This typically occurs when you return to the UK after living in Dubai for less than five years or if you were a UK resident for at least four of the seven tax years before relocating to Dubai.

Typically, the country where you obtain residency imposes taxes on your global income. Due to the UAE’s zero-tax policy, you won’t be subject to any taxes once you become a UAE resident. To qualify for residency, you must fulfil one of the following conditions:

1. You are physically present in the UAE for 183 days or more per year.
2. The centre of your personal and financial interests, as well as your primary residence, is in the UAE.
3. You spent at least 90 days in a consecutive 12-month period in the UAE and:
   • Are employed in the Emirates
   • Have a permanent place of residence there
   • Are a UAE national or a national of any Gulf Cooperation Council (GCC) member state, or hold a valid UAE residence permit.

What Tax Rules Apply When Moving a UK Company to Dubai?

The UAE levies a 9% corporate tax on businesses with UAE residency and annual income exceeding AED 375,000. This tax rate also applies to freelancers and self-employed individuals with a yearly income of AED 1 million or more.

Companies in the UAE’s Free Zones – designated economic areas offering tax advantages – may benefit from a 0% corporate tax rate on qualifying income. If a Free Zone Person meets all the required conditions, they can enjoy 0% corporate tax on all qualifying income, not only amounts under the AED 375,000 threshold.

If your company has a fixed place of business in the UK, profit of up to £50,000 is taxed at 19% in the UK, while profit over £250,000 is subject to a 25% rate.

Meanwhile, UK-based companies aren’t subject to corporate tax in the UAE unless they have a permanent establishment (an office or a branch) in the Emirates. In that case, the profit generated from that permanent establishment is taxable in the UAE, while the income earned in the UK remains taxable only in the UK.

In addition to corporate tax, a company is liable for the UAE’s value-added tax (VAT) of 5% if its annual taxable supplies exceed AED 375,000. Some goods and services, such as education, healthcare, and international transportation, are exempt from VAT.

How Does Relocating to Dubai From the UK Impact Your Pension?

If you receive a pension from a UK provider, any withdrawals exceeding available allowances are subject to UK income tax, regardless of your residency. However, pension income is not taxed in the UAE.

UK tax applies to both state and private pensions. You may withdraw up to 25% of your retirement savings – capped at the lump sum allowance of £268,275 – as a tax-free pension commencement lump sum. Any further withdrawals are taxed at your marginal rate.

The standard personal allowance of £12,570 is generally available only to UK residents. However, UK nationals, citizens of the European Economic Area (EEA), or individuals entitled under a UK double taxation treaty may still claim the allowance after becoming non-resident. This requires submitting form R43 each tax year, unless filing through Self Assessment.

To reduce UK tax exposure on pension income, expats may consider transferring retirement savings to an international pension scheme approved by His Majesty’s Revenue and Customs (HMRC).

While recognised overseas pension schemes (QROPS) offer this option, transferring to a QROPS outside the UK or EEA may trigger a 25% Overseas Transfer Charge unless you and the scheme are in the same jurisdiction.

Where Can You Transfer Your Pension When Relocating From the UK to Dubai?

You can’t transfer your UK pension directly to Dubai as there is no HMRC-approved pension plan based in the UAE. Instead, you can transfer your UK pensions to a standard or international self-invested personal pension (SIPP) to reduce taxation and ensure efficient management of your retirement savings while living in Dubai.

SIPPs are HMRC-approved pension plans regulated by the Financial Conduct Authority (FCA) in the UK.

Annual contributions to a SIPP are limited to £60,000 or 100% of UK-relevant earnings for UK residents.

Non-residents are limited to £3,600 annually unless they have UK-relevant earnings. However, there is no limit on the pension transfer amount, making these plans suitable for pension consolidation.

The primary benefits of both standard and international SIPPs are:

1. Tax advantages: There is no comprehensive UAE–UK double taxation agreement (DTA). However, under UK domestic law, pension income received by non-residents is generally only taxable in the UK if it originates from UK-registered schemes. As a UAE resident, you may benefit from UK tax exemptions or allowances depending on your nationality and income type.
2. Withdrawal flexibility: 25% of your pension can be withdrawn as a pension commencement lump sum, but any amounts exceeding the lump sum allowance are taxed as income. Additionally, by utilising the flexi-access drawdown option, the remaining, taxable portion of the pension can be withdrawn through regular instalments or lump-sum payments, while keeping the remaining funds invested.

Between standard and international SIPPs, the latter are more suitable for UK expats moving to Dubai because they allow pension withdrawals in multiple currencies, protecting you from currency exchange risks; standard SIPPs are typically held in GBP.

Holding your retirement savings in SIPPs provides access to a wide selection of investment options, including ETFs, mutual funds, and real estate, which can accelerate your wealth growth significantly.

If you die before age 75, your beneficiaries – regardless of their tax residency – can typically receive the remaining pension funds tax-free. If you die at age 75 or later, benefits are taxed at the recipient’s marginal rate.

The UAE has its national pension scheme under the General Pension and Social Security Authority (GPSSA). However, you can’t transfer a UK pension to this scheme. You can only accumulate retirement savings in GPSSA while working in Dubai, provided you meet specific criteria, such as being married to a UAE national and being a UAE resident for over 30 years.

What Should Be on Your Moving to Dubai From the UK Checklist?

To streamline your transition to Dubai and safeguard your finances, your moving checklist should include the following:

1. Opening a bank account overseas
2. Reviewing health insurance options
3. Considering offshore investment opportunities

Opening a Bank Account Overseas

Once you relocate to Dubai from the UK, you’ll need a local or international bank account to manage your finances more effectively. While holding your funds in the UK is a viable option, utilising an overseas account provides greater control over your savings while living abroad.

A local bank account offers advantages such as tax-free banking and multi-currency withdrawals. Although some UAE banks allow you to open an account as a non-resident, most require you to obtain UAE residency before granting access to banking services.

Some UAE banks, like Emirates NBD, include packages for expats and non-residents, provided you meet specific salary and minimum balance requirements.

If you don’t qualify for a UAE-based account, you should consider establishing an offshore bank account.

These accounts are based in a jurisdiction outside of your home or residential country and provide various account solutions, including checking and savings accounts. Most accounts offer the following benefits:

• Greater confidentiality: Many countries that offer offshore banking have strict privacy laws, ensuring your financial information is secure and inaccessible to the public.
• Improved financial security: Holding your funds in a stable offshore jurisdiction provides access to multi-currency withdrawals and foreign investment opportunities, resulting in a higher potential for significant wealth growth.
• Portability: Offshore banking is particularly suitable for UK expats who move frequently or don’t plan on retiring in the UAE, as these accounts provide access to funds from any location.
• Tax efficiency: Since offshore accounts are usually based in low or zero-tax jurisdictions like the Isle of Man, your savings are exposed to lower tax rates, allowing you to maximise wealth retention.

Reviewing Health Insurance Options

Health insurance is mandatory for all residents in the UAE, but only UAE nationals are eligible for government-funded health insurance. Therefore, before moving to Dubai from the UK, choose a private health insurance that suits your needs and financial circumstances.

If you’re employed in Dubai, your employer is required to provide you with basic coverage. However, this type of insurance won’t cover your dependents.

The costs vary depending on the type of health insurance you choose. Basic annual health insurance typically ranges from AED 600–800 per person, while premium yearly plans can cost as much as AED 15,000 per person.

Considering Offshore Investment Opportunities

Dubai is among the most popular investment destinations for expats, as it provides a wide array of investment opportunities for both UAE residents and non-residents and doesn’t impose taxes on investment growth.

Although UK non-residents are exempt from tax on foreign investment gains, if you are still a UK tax resident after moving to Dubai or you return to the UK and regain your UK tax residency, the gains will be taxable in the UK.

For this reason, you should consider purchasing offshore bonds instead of investing directly in Dubai-based assets.

The Benefits of Offshore Bonds

Offshore bonds are tax-efficient wrappers that allow you to invest a lump sum in various global assets, including cash, stocks, shares, bonds, and property.

The invested funds are subject to tax-deferred growth, which means that they don’t incur taxes until withdrawn, provided your residential country taxes bond income.

Additionally, you’re typically allowed to withdraw up to 5% of your initial investment each year without being liable for immediate taxation.

Some of the additional advantages offered by offshore bonds are:

• Efficient estate planning: Offshore bonds are assignable assets—you can transfer them as a gift to anyone under 18 without triggering capital gains tax. You can also transfer them to a trust to avoid inheritance tax if you aren’t considered a long-term UK resident.
• Tax reduction for non-residents: If you purchase an offshore bond while you’re a UK resident, or reclaim your UK residency and continue holding the bond, you will be liable for taxes. However, the time apportionment relief (TAR) allows you to alleviate UK tax on the chargeable gains accrued while you were a UK non-resident, reducing your tax burden.
• Cross-border flexibility: You can benefit from offshore bonds regardless of your home or residential country. Their global accessibility makes them particularly suitable for expats who don’t plan on staying in Dubai permanently.

Is It Worth Moving to Dubai From the UK?

Whether moving to Dubai from the UK is worthwhile depends on your financial goals and circumstances. To determine if Dubai is suitable for relocation from the UK, consider the following cost differences between Dubai and London:

1. Cost of living
2. Housing prices

Cost of Living

The cost of living in Dubai is approximately 22% lower than in London, allowing you to reduce everyday expenses and allocate funds toward diverse investments to grow your wealth. The table below outlines the cost of living in Dubai vs London:

However, the exact costs will depend on your lifestyle and spending habits.

Housing Prices

Whether you decide to rent or purchase a property, housing is generally more affordable in the UAE than in the UK. For instance, flat prices in London can be up to £15,000 per square meter if the flat is located in the city centre, or around £8,000 if it’s outside the city centre.

Meanwhile, the price range in Dubai is around £3,000–5,000 per square meter, depending on the location.

Additionally, expats are allowed to purchase property in the UAE’s freehold areas, such as Discovery Gardens and Downtown Dubai.

They are designed specifically for foreign nationals, allowing them to obtain full and permanent ownership rights over the real estate.

For approximate rent prices in Dubai and London, consult the table below: