Why the UK framework diverges from the French model

UK residents relocating to the UAE operate under a tax framework that diverges materially from the French context. The UK has no exit tax on unrealised capital gains comparable to French article 167 bis CGI. Capital gains are generally taxed only on disposal. However, the UK's statutory residence test (SRT), the recently abolished non-domiciled regime (replaced by the FIG regime since 6 April 2025), and the UK-UAE bilateral tax treaty of 12 April 2016 create their own complexity.

Statutory Residence Test (SRT)

The SRT is the cornerstone of UK tax residency. It applies a series of automatic tests followed by sufficient ties tests to determine whether an individual is UK tax resident in a given tax year (6 April – 5 April).

Automatic UK tests

• Present in the UK for 183 or more days in the tax year — automatically resident.
• Only home was in the UK for at least 91 consecutive days, with at least 30 days of UK presence.
• Working full-time in the UK for any 365-day period.

Automatic overseas tests

• Present in the UK for fewer than 16 days (where resident in any of the 3 prior tax years).
• Present in the UK for fewer than 46 days (where not resident in any of the 3 prior tax years).
• Working full-time abroad with limited UK days (sufficient ties applied).

Sufficient ties test

If neither set of automatic tests applies, the SRT examines five connecting factors: family in the UK, accommodation in the UK, work in the UK, 90-day test, country tie. The number of UK days permitted varies inversely with the number of ties.

FIG regime (from 6 April 2025)

The non-domiciled regime was abolished on 6 April 2025 and replaced by the Foreign Income and Gains (FIG) regime, available to new UK residents who have not been UK tax resident in any of the 10 preceding tax years. Under the FIG regime, foreign income and gains arising in the first 4 years of UK residence may be exempted from UK tax, provided they are claimed on the tax return.

For UK persons relocating to the UAE, the FIG regime is irrelevant. But returning to the UK after a UAE stint may benefit from FIG if the absence has been long enough.

UK-UAE tax treaty (12 April 2016)

The UK-UAE Double Taxation Convention entered into force on 25 December 2016. It follows the OECD Model with significant variations:

• Article 4 (Residence): standard tie-breaker — permanent home, centre of vital interests, habitual abode, nationality.
• Article 13 (Capital gains): generally taxable only in the State of residence, with specific provisions for real property.
• Article 17 (Pensions): pensions are generally taxable only in the State of residence, subject to the specific rules of the treaty.
• Article 18 (Government service): applies to remuneration and pensions paid by a Contracting State or its political subdivisions/local authorities.
• Article 20 (Other income): items of income not dealt with in the preceding articles are generally taxable only in the State of residence, subject to the treaty's specific exceptions.
• Article 21 (Elimination of double taxation): provides the mechanism for double tax relief.

Capital gains: timing matters

The UK has no equivalent to the French exit tax. Capital gains are taxed on disposal, in the residence state of the seller. A UK person who becomes UAE resident before disposing of their portfolio generally avoids UK CGT, provided:

• They have ceased to be UK resident (split year treatment carefully managed);
• They remain non-resident for at least 5 complete tax years (otherwise the temporary non-residence rules bring back UK CGT on disposals during the absence);
• The asset is not UK situated property (UK real estate, certain UK trading assets).

UK residential property: continued exposure

Even after becoming UAE resident, UK persons retain UK exposure on:

• UK rental income: taxable in the UK under the Non-Resident Landlord Scheme.
• UK property disposals: CGT applies on disposals of UK residential and commercial property (Finance Act 2019).
• Inheritance tax: UK IHT applies to UK situs assets for any holder, whatever their residence status. For worldwide assets, since the 6 April 2025 reform the connecting factor is no longer domicile but long-term residence (UK residence in at least 10 of the previous 20 tax years).

Practical roadmap for a UK-to-UAE move

1. SRT analysis of departure year and split year treatment.
2. Clean break: limit UK days, sever ties.
3. Document UAE presence for the SRT and for UAE residency under Cabinet Decision No. 85 of 2022.
4. Plan disposal of investments either before departure (UK CGT applies) or after an absence of at least 5 complete UK tax years (temporary non-residence rules).
5. Manage UK property portfolio under NRL and CGT for non-residents rules.
6. Apply for UAE Tax Residency Certificate after 12 months of UAE presence.
7. Coordinate with a UK chartered tax adviser and a UAE counsel from day one.