Do I Have To Pay UK Tax if I Work in Dubai? A Guide for UK Expats

This guide explains how your UK tax residency status affects your liability while working in Dubai. It also outlines how the UK–UAE double taxation agreement can help reduce or eliminate cross-border tax exposure.

Do You Pay Tax in the UK if You Work in Dubai?

Your UK tax liability while working in Dubai depends on whether you’re considered a UK tax resident.

The UK taxes its residents on worldwide income, including earnings from employment, business, property, and capital. In contrast, UK non-residents are only taxed on UK-sourced income — income earned in Dubai is typically exempt.

How Is Tax Residency Determined as an expat in Dubai?

Tax residency is assessed based on the UK’s Statutory Residence Test. You’ll be considered a UK tax resident if you meet any of the following conditions in a given tax year (6 April to 5 April):

1. You spend 183 or more days in the UK.
2. Your only home is in the UK for at least 91 consecutive days, and you spend at least 30 of those days there.
3. You work full-time in the UK for a 365-day period, with at least one working day falling in the tax year.
4. You meet the “sufficient ties” test, which considers your UK work, accommodation, and family connections.

If none of the above applies, you may be considered non-resident under the following automatic overseas tests:

1. You spent fewer than 16 days in the UK during the tax year (or fewer than 46 if not UK resident in the previous three years)
2. You worked full-time abroad (average of 35+ hours per week), spent fewer than 91 days in the UK, and worked no more than 30 of those days

Which UK Taxes Are Expats Working in Dubai Liable For?

Your UK tax exposure as an expat in Dubai depends on your UK residency status -particularly if you’re still considered a UK tax resident or recently repatriated.

UK Residents Working in Dubai

If you remain a UK tax resident while living in Dubai, you are liable for UK tax on your worldwide income — including employment income earned in the UAE.

For UK tax residents, varying tax rates apply to UK-sourced and foreign-earned income, as outlined below for the 2025/26 tax year:

UK Non-Doms Working in Dubai

Previously, non-domiciled UK tax residents could use the remittance basis to avoid UK tax on foreign income, provided they didn’t remit it to the UK.

However, from 6 April 2025, the UK abolished non-dom status and replaced it with a four-year tax relief scheme.

Under this new regime, returning expats may receive full relief on foreign income and gains for their first four years of renewed UK residency, provided they were non-resident for at least 10 of the previous 20 tax years.

Do UK Citizens Pay Tax in Dubai?

Unlike the UK, the UAE does not levy personal income tax regardless of your source of income or tax residency status. This means UK expats living and working in Dubai are not taxed locally on salaries, capital gains, dividends, or inheritance.

However, UK expats working in Dubai may be liable for the UAE’s corporate tax if they operate a business in the country and meet certain conditions, as outlined in the table below:

Corporate tax is limited to UAE-based business profits. If your UAE business has a permanent establishment (PE) – such as a branch office – in another country, that income may also be taxed in the UAE.

The UK–UAE double tax agreement (DTA) ensures that only one jurisdiction applies tax to PE profits, preventing double taxation.

VAT Considerations

In addition to corporate tax, the UAE imposes a 5% value-added tax (VAT) on most goods and services for businesses with taxable supplies over AED 375,000 annually. Key exemptions include:

• International transport (e.g. flights, trains).
• Education and healthcare (in specific cases).
• Gold, silver, and platinum (investment-grade).
• Exports and certain financial services.

The UK–UAE DTA does not cover VAT, so businesses operating in both jurisdictions may face VAT liabilities in each.

In the UK, the standard VAT rate is 20% and applies if your business:

• Is based outside the UK but supplies to the UK.
• Expects taxable turnover to exceed £90,000 within a rolling 12-month period or in the next 30 days.

How Does the UK-UAE Double Tax Treaty Work?

The UK and UAE maintain very different tax systems, with the UK taxing global income and the UAE offering a low or zero tax regime.

The UK–UAE double tax agreement helps determine which country has taxing rights over specific types of income and is designed to prevent the same income being taxed twice.

To benefit from the DTA, you must be a tax resident of either the UK or the UAE. UK expats living in Dubai who no longer meet UK tax residency criteria should ensure they qualify as UAE tax residents to avoid UK taxation on foreign income.

Switching from a UK to a UAE tax residency can significantly reduce your tax exposure if properly planned and documented.

You are considered a UAE tax resident if you:

• Spend more than 183 days in the UAE within a 12-month period; or
• Have primary residential and financial ties in the Emirates; or
• Are present in the UAE for over 90 days per year and are either a UAE national or hold a valid residence visa.

In the next section, we explain how the UK–UAE DTA allocates taxing rights for:

• Employment income.
• Capital gains.
• Real estate.
• Interest, dividends, and royalties.

Employment Income

Under the UK–UAE double tax agreement, employment income is generally taxed only in the country where it is earned. Therefore, if you are a UAE tax resident earning income from employment in Dubai, that income is not subject to UK tax.

However, if you are still considered a UK tax resident and work in Dubai for fewer than 183 days during a tax year, an exception may apply.

In such cases, your Dubai-earned income could remain taxable in the UK if:

• Your employer is not a UAE resident, and,
• Your income is not derived from the employer’s permanent establishment in the UAE.

Capital Gains

Even if you are a UAE tax resident, certain capital gains may remain taxable in the UK under the double tax agreement. The UK retains taxing rights in the following situations:

• UK property sales: Capital gains from selling UK real estate are always taxable in the UK, regardless of your residency.
• Shares in property-rich companies: If you sell shares in a company whose primary value is derived from UK property, gains are taxable in the UK—unless the shares are publicly traded.
• Disposal of UK business assets: If a UAE-based company disposes of a permanent establishment (PE) located in the UK, the resulting capital gains are subject to UK tax.

Real Estate

If you are a UAE tax resident earning rental income from UK property, that income remains taxable in the UK.

As a non-resident landlord, you are subject to the Non-Resident Landlord Scheme (NRLS), which requires your UK letting agent (or tenant, if no agent exists) to withhold tax at a rate of 20% to 45% on gross rental income.

Even if no UK tax is ultimately due, you must file a UK self-assessment tax return to reclaim any excess tax withheld.

In contrast, rental income from UAE property is not subject to income tax, as the UAE does not currently tax property income. However, property ownership in Dubai may involve the following local fees:

• 4% property registration fee.
• 4% property transfer fee.
• AED 3,000–6,000 annual maintenance fees, depending on property size.
• 0.25% mortgage registration fee, if applicable.

Interest, Dividends, and Royalties

Under the UK–UAE double taxation agreement, interest, dividends, and royalties paid by a UK company to a UAE tax resident are generally taxable only in the UAE.

As the UAE does not currently impose tax on such income, these payments are effectively tax-free for most expats.

However, if you operate a business through a permanent establishment (PE) in the UK, any interest or royalties attributable to that PE are treated as business income and may be taxed in the UK. The same applies in reverse for UK residents operating through a UAE-based PE.

How Is Your Tax Status Affected if You Return to the UK?

If you return to the UK from Dubai, and re-establish tax residency, you will once again be liable for UK tax on your worldwide income.

In certain cases, you may qualify for split-year treatment if you return to the UK during the tax year, allowing your tax year to be divided into two parts:

• A non-resident period, during which your foreign income is not taxed in the UK.
• A resident period, in which standard UK tax rules apply.

This treatment is available only if specific HMRC conditions are met, such as moving to the UK for full-time work or establishing your only home there.

Even if you don’t meet standard residency criteria, the temporary non-residence rules may still apply.

These affect individuals who return to the UK within five years of leaving – provided they were UK tax residents for at least four out of the seven tax years before departure. If triggered, these rules may subject your previously untaxed foreign income to UK tax.