Millionaires return to UAE to save tax residency - FT

Residents of Dubai, who have found themselves outside the emirate because of the war with Iran, are trying to return home as soon as possible, travel company managers and lawyers told the Financial Times. In this way, tax residents are trying to maintain their status in order not to face large tax liabilities due to staying abroad for too long, the publication explains.

Charles Robinson, founder of European private jet marketplace EnterJet, told the Financial Times that he is being approached by customers wanting to fly to the UAE. "A certain minimum number of days in the region during the financial year is required to spend in the region to take advantage of the tax regime,. Some apparently need to return to close that limit," he said. - In many cases, the cost of the flight is significantly lower than the potential tax bill if the individual fails to meet the requirements."

The Dubai office of law firm Taylor Wessing has received "confidential inquiries about counting days in the UK, and for clarification on how failure to comply with UAE residency regulations could affect tax status", the firm's managing partner Ronald Graham said. He noted that most clients are still taking a wait-and-see approach before taking any steps, but wealthy individuals "very much value the ability to move and work wherever and whenever they want, and if events such as war with Iran prevent that, they don't like it."

"There is a whole group of people who are currently in the UK and cannot return home. They have immigration status issues as well as possible tax problems," Hannah Vailoo of law firm Withers shared with the FT. According to her, staying too long outside the UAE can create two tax problems: a person may not spend enough days in Dubai to be considered a tax resident, and at the same time spend too many days in the UK - and then be recognized as a resident of this country, which will lead to an increase in the tax burden.

As a rule, to be considered a tax resident of the UAE, a person must spend 183 days in the country during a 12-month period, the FT writes. Another option is a minimum of 90 days if there is a resident visa, permanent residence in the UAE and work or business in the country.

The UK determines tax status based on a residency test: the number of days a person can or must spend in the country depends on how many links they have with it. Some people can remain non-residents by living abroad and spending up to 120 days in the UK, while others - with closer ties to the country - have to limit their stay to 90 days, 46 days or even less, the FT explains.

Eamon Shahir, co-founder of online tax filing service Taxd, who advises people moving from the UK to the Gulf, said the key challenge for most of those splitting their time between the states is maintaining non-resident status under the UK test.

Wealthy Dubai residents from other countries, such as India and France, are facing similar difficulties, the publication says. And many UAE residents, on the contrary, are desperate to leave. According to insurance companies providing crisis evacuation services, the cost of renting private planes and cars has risen sharply as some companies try to get their employees out, the FT writes.

This article was AI-translated and verified by a human editor