Repatriation Financial Advice Saudi Arabia: Exploring Tax-Efficient Strategies for UK Expats

This article will provide essential repatriation financial advice in Saudi Arabia for expats returning to the UK. It will explain the tax implications of repatriation and outline effective strategies for managing your wealth, pensions, investments, and insurance during the transition, as well as the practical steps needed to re-establish UK tax residency and access essential services.

When To Begin Planning Repatriation From Saudi Arabia

It is generally advisable to start planning your repatriation at least 12 to 18 months before returning to the UK. This timeframe provides sufficient opportunity to review your financial affairs and make the necessary arrangements for the transfer of your pensions, savings, and insurance.

Since the UK tax year runs from 6 April to 5 April of the following year, timing your return to coincide with the start of the tax year allows you to streamline tax management, particularly in relation to Statutory Residence Test outcomes and eligibility for split-year treatment, reducing the complexity of splitting taxes across multiple tax years.

What Are the Tax Implications of Returning to the UK From Saudi Arabia?

Your tax liability upon returning to the UK is determined by your tax residency status. UK residents are subject to tax on their worldwide income and gains, whereas non-residents are only taxed on income sourced within the UK, unless an applicable double tax agreement (DTA) prescribes otherwise.

From April 2025, the UK abolished the domicile-based tax regime and the remittance basis, meaning returning expats can no longer rely on non-dom status to exclude foreign income or gains from UK taxation.

Instead, eligibility for new regimes such as the Foreign Income and Gains (FIG) regime or the Temporary Repatriation Facility (TRF) determines whether any relief is available on overseas income and gains during and after repatriation.

The UK tax rates are consistent for residents and non-residents and include:

• Income tax: Progressive rates of up to 45% on income above the personal allowance of £12,570.
• Capital gains tax: 18% or 24% on most assets, including residential property, with lower rates applying where gains fall within the basic-rate band and higher rates applying above it.
• Inheritance tax: 40% on the value of the taxable estate exceeding the nil-band of £325,000, with potential access to the residence nil-rate band if eligibility criteria are met.

Conversely, Saudi Arabia imposes no tax on most types of personal income and no general capital gains tax, except for a 20% tax on the disposal of shares in Saudi-resident companies. Real estate transactions are subject to a 5% Real Estate Transaction Tax (RETT), which is not a capital gains tax but still affects disposal planning.

As a result, expats who are considered UK non-residents before repatriation are subject to a favourable tax treatment while still in Saudi Arabia. However, returning to the UK implies that they will eventually become a UK tax resident.

You are automatically considered a British tax resident if you spend more than 183 days in the UK within a single tax year. Even if you stay fewer than 183 days, you may still qualify as a UK resident under the Statutory Residence Test (SRT), depending on your UK ties, such as family, accommodation, or work connections.

For many returning expats, the timing of arrival can significantly affect overall tax exposure, eligibility for split-year treatment, and whether the UK’s temporary non-residence rules apply to gains realised overseas before repatriation.

The post-2025 reforms also mean that the timing of foreign income and gains, and any transfers of funds to the UK, now has different tax consequences compared with the former non-dom regime.

Other KSA Financial Obligations Before Exit

Before departing Saudi Arabia, expats should also ensure they have settled local obligations that may affect the timing of repatriation, including:

• GOSI: expatriates typically contribute only for occupational injury insurance, but confirm any outstanding or refundable contributions.
• Zakat: not applicable to expatriate individuals, but relevant for Saudi/GCC nationals and certain business structures.
• Exit clearance (“final exit”) compliance: closing bank accounts, settling utility balances, employer clearance certificates, and cancelling local services to avoid delays.

These administrative steps can impact the timing of transfers and the availability of documentation required for UK tax reporting and for demonstrating the source of funds when moving money into the UK, which is often required by UK banks and HMRC.

Strategies to Reduce Tax Liability Upon Repatriating to the UK From Saudi Arabia

Although UK taxation applies once you return home and reestablish residency, there are strategies that may help you reduce your tax liability or claim tax exemptions. Key approaches are to:

1. Realise gains in Saudi Arabia
2. Leverage available tax reliefs in the UK
3. Receive end-of-service gratuity as a non-resident
4. Repatriate partway through the year
5. Re-engage with UK tax-efficient savings and investment wrappers
6. Plan the timing of fund transfers, particularly where foreign income or gains fall within the post-2025 UK tax reforms

Realise Gains in Saudi Arabia

Unlike the UK, Saudi Arabia generally does not impose capital gains tax (CGT) on individuals selling most personal assets.

Consequently, planning repatriation at least a year in advance allows you to dispose of specific assets while you are still a tax resident of the KSA, provided the UK’s temporary non-residence rules do not apply, thereby avoiding the UK CGT rates of 18% or 24%, which apply to most chargeable assets, including residential property, depending on your income level.

Be aware that individuals who are temporarily non-resident may be taxed on certain capital gains realised abroad during their period of non-residence if they return to the UK within five tax years. This status applies if you:

• Lived overseas for less than five consecutive tax years before repatriation.
• Were a UK resident for at least four of the seven tax years before relocating abroad.
• The asset was personally owned (not held in certain excluded structures).

Disposing of Saudi Real Estate Before Leaving

While Saudi Arabia does not impose CGT on most real estate disposals, a 5% real estate transaction tax (RETT) applies to property sales.

If you plan to sell property before leaving, consider the timing, as the UK may tax the gain depending on:

• Whether you are UK-resident at the point of disposal.
• Whether temporary non-residence rules apply.

This makes advance repatriation planning important where property is involved.

Leverage Available Tax Reliefs in the UK

Following the abolition of the domicile-based and remittance-based tax regimes in 2025, the UK introduced reforms that allow returning expats to reduce their tax liability on foreign income and gains, provided they meet specific eligibility criteria.

Since April 2025, the main reliefs for returning expats are as follows:

These regimes replace the former non-domiciled tax system and create new planning considerations around the timing of income, gains, and remittances.

Receive End-of-Service Gratuity as a Non-Resident

Individuals employed in Saudi Arabia typically receive an end-of-service gratuity—a bonus based on the duration of their service.

If you worked in Saudi Arabia while residing there, you may receive:

• Half a month’s wage for each year of service for the first five years
• One month’s wage for every year of service beyond the first five years

This law applies to full-time employees and, in some cases, part-time employees, depending on their contract and working hours.

The end-of-service gratuity is tax-free in Saudi Arabia, but is generally treated as taxable employment income in the UK unless received while still non-resident or falling within a split-year non-resident period.

Therefore, if you qualify for this payment, consider timing repatriation to ensure you receive it while still a UK non-resident.

Repatriate Partway Through the Year

Depending on your circumstances, you may be eligible for split-year tax treatment, which allows you to be treated as a UK non-resident for the part of the year you spent in Saudi Arabia before repatriating.

You qualify for the split-year treatment if you meet specific conditions under the UK’s Statutory Residence Test (SRT). Additionally, you are typically required to maintain your UK residency in the following tax year for the split-year treatment to apply.

The rules divide the tax year into a non-resident and resident period, based on when your circumstances change:

Re-Engage With UK Tax-Efficient Savings and Investment Wrappers

While residing in Saudi Arabia, you may have been unable to access or benefit fully from UK tax-advantaged savings or investment structures. Once you reestablish UK residency, it becomes essential to reintegrate these vehicles into your financial strategy to ensure your wealth or retirement savings continue to grow in a tax-efficient manner.

Some of the key structures you can utilise to optimise the tax position of your retirement savings and investments include the following:

Professional advice is strongly recommended here, as the tax treatment of these structures can vary depending on your residency history, domicile position prior to April 2025, and the nature of the underlying assets.

Plan the Timing of Fund Transfers Under the Post-2025 UK Tax Reforms

The timing of moving funds from Saudi Arabia to the UK is now a critical part of repatriation planning due to the UK’s post-2025 reforms to foreign income and gains.

The abolition of the remittance basis means returning expats must understand when foreign income or gains become taxable in the UK and whether any transitional relief applies.

If you qualify for the Temporary Repatriation Facility (TRF), transferring foreign income and gains realised before 6 April 2025 may attract a reduced tax rate (12% until 2027 and 15% thereafter).

If you qualify for the Foreign Income and Gains (FIG) regime, foreign income and gains arising during the first four UK tax years of UK residence may be exempt from UK tax, even if brought to the UK, provided the FIG conditions are met. Once the FIG period ends, new foreign income and gains will generally be taxable on the arising basis.

For this reason, it is essential to:

• Identify which income or gains arise before vs. after 6 April 2025.
• Determine whether they fall within FIG eligibility or TRF scope.
• Avoid remitting funds to the UK prematurely if such remittances would trigger immediate tax charges.
• Provide UK banks with documentation showing the source and timing of funds to satisfy AML and HMRC requirements.

Carefully sequencing transfers, before, during, or after repatriation, can materially affect your tax position and help ensure compliance with HMRC’s new rules.

How Does Leaving Saudi Arabia Impact Insurance Coverage?

Insurance arrangements held during your time in Saudi Arabia may not remain valid upon your return to the UK. Many policies are tied to your local residency status or employment contracts, and your coverage could lapse or become limited after your repatriation.

It is therefore important to review all existing policies before departure and understand what protection will be in place during the transition period.

Consider the following policies before moving back to the UK:

• Health insurance
• Life and property insurance

Health Insurance

While residing in Saudi Arabia, most expats are covered under employer-provided health insurance schemes. This coverage generally ceases upon termination of your employment in the Kingdom.

Returning to the UK and reestablishing your residency means you will regain access to the National Health Service (NHS).

There is no formal waiting period for NHS entitlement, but you may be asked to demonstrate “ordinary residence” – the intention to live lawfully in the UK on a settled basis – before accessing non-emergency services.

To ensure uninterrupted medical coverage during this transition, it is advisable to arrange short-term private health insurance until you are fully eligible for NHS services and have successfully registered with a GP in the UK.

Life and Property Insurance

Before returning to the UK, confirm whether your life insurance in Saudi Arabia is portable and valid outside Saudi Arabia. If you have an international life insurance policy, you may still be protected upon repatriation.

Even if the policy remains valid, it’s recommended to review its terms to ensure the coverage aligns with your financial and retirement goals post-return. You can then retain your current policy or opt for a new one.

Premiums can vary significantly between insurers and jurisdictions, so a comparison of both UK-based and international options is advisable.

Additionally, if you have property insurance in Saudi Arabia, the coverage will not transfer to your home in the UK, as the policy is tied to a specific property. Therefore, you must obtain a separate policy to protect your property in the UK.

If you retain property in Saudi Arabia, you may also need to maintain or update a local policy to ensure ongoing protection.

How Can Repatriation Financial Advice in Saudi Arabia Streamline Your Return to the UK?

While seeking financial advice during repatriation is not legally required, professional guidance can significantly streamline the process and help ensure compliance with UK tax rules that apply on or after the date you become a UK resident again.

Key areas where repatriation financial advice can add value include:

• Tax residency assessment: Determining your tax residency after returning to the UK and ensuring full compliance with UK tax regulations.
• Tax relief optimisation: Identifying available tax reliefs and verifying your eligibility to minimise your overall tax burden, including assessing whether the Foreign Income and Gains (FIG) regime or the Temporary Repatriation Facility (TRF) applies.
• Pension transfer planning: Evaluating your existing pension arrangements and recommending suitable transfer options aligned with your long-term retirement goals while ensuring compliance with UK pension transfer rules and avoiding unnecessary tax charges, including any Overseas Transfer Charge (OTC) that may apply to transfers into or out of certain overseas pension schemes.
• Insurance review: Exploring international or UK-based insurance policies that offer adequate coverage as you transition from employer-provided benefits in Saudi Arabia back into the UK system.
• Investment restructuring: Reviewing your investment portfolio and developing a suitable investment strategy after returning to the UK that reflects your new tax status, access to UK tax wrappers, and potential currency exposure following the move from SAR to GBP.