UK hopes to lure expats back from UAE as war challenges Dubai’s appeal
City workers in the Business Bay financial district of Dubai, United Arab Emirates, on Wednesday, March 4, 2026.
Walaa Alshaer| Bloomberg | Getty Images
As war in the region threatens the city’s reputation as an attractive haven, the UK government is trying to turn geopolitical turmoil into an opportunity, encouraging thousands of Britons to rethink life in Dubai.
Approximately 240,000 British nationals live in the UAE. For years, zero income tax, security, international schools and a lavish lifestyle have attracted them. Now, with missiles intercepted over Gulf capitals and air travel repeatedly disrupted, the long-standing stability of expat life in Dubai is being called into question.
Last week, British finance minister Rachel Reeves praised the country’s “competitive tax system” when speaking to CNBC’s Sara Eisen at the “Invest in America” forum.
“We have the lowest corporate tax rate in the G7,” he said, citing tax and investment incentives and encouraging firms to list in London, where they would not have to pay stamp duty on shares for the first three years.
Reeves hopes to portray Britain as a “safe haven economy” for wealthy foreigners and has said the Treasury will review tax rules. Reuters It was reported citing an unnamed official. The UK Treasury did not respond to CNBC’s request for comment.
Are England seizing the moment?
Early signs suggest fighting has already triggered movement among British nationals living in the UAE, although not necessarily back to the UK
Nearly one in eight Britons living in the UAE, or around 30,000 people, have left the country since the conflict began on February 28, according to data cited by the Financial Times. CNBC reached out to the British Embassy and the Dubai Media Office but were unable to confirm the figures.
While many departures may be precautionary rather than permanent, the figures point to a break in a steady migration from Britain to the Gulf.
Some families returned to Europe temporarily, heading to centers of wealth such as Switzerland or sunnier, lower-cost destinations such as Spain and Portugal to wait out the conflict. Whether Britain will benefit from this reassessment may depend on how long the war lasts and whether Britain’s economic proposition actually improves.
Dubai’s safe port status
Those leaving the UAE include families worried about security, professionals who have repeatedly faced flight suspensions, and entrepreneurs re-evaluating long-term plans in a suddenly unstable region.
An Emirates Boeing 777 aircraft prepares to land as a cloud of smoke rises from an ongoing fire near Dubai International Airport in Dubai on March 16, 2026.
– | Afp | Getty Images
The pressure on households with children has increased. Schools across the Emirates were closed for weeks after the war began, shifting students to distance learning; This led some parents interviewed by CNBC since the beginning of the war to send their children back to their home countries to complete their academic semesters with face-to-face education in schools.
Dubai’s appeal has never been solely financial. He tried to attract Westerners with the promise that they could benefit from Middle Eastern opportunities without instability in the Middle East.
The stakes are high for the UK.
Nearly 6,000 high-growth British business owners moved abroad between January 2024 and January 2026, according to a report in February. analysis By Rathbones, with reference to entries on the UK’s official company register. UAE was the most popular destination, followed by Spain and the USA.
According to the analysis, migration was heavily concentrated in London and the South East and was dominated by the technology sector, where one in ten founders moved abroad.
UK tax vs Dubai tax
The tax center remains a fault line.
The UAE does not levy any personal income tax or capital gains tax, while the UK has tightened its long-standing “non-dom” regime for taxpayers whose permanent tax home is outside the country. It abolished the remittance basis from April 2025, replacing it with a residence-based system where most long-term residents are taxed on their worldwide income and earnings.
Under the new rules, only new arrivals to the UK and those who have spent at least 10 consecutive years abroad are eligible for a four-year limited exemption on foreign income and gains. From now on, global income will be fully taxable; This is a sharp break from the previous system, which allowed wealth to remain offshore indefinitely.
The UK also increased employer National Insurance contributions from 13.8% to 15%, while also lowering the earnings threshold at which the tax applies.
The government has also cut aid to investors by reducing the lifetime allowance for capital gains that qualify for preferential treatment from £10 million to £1 million, or about $1.35 million; This has weakened incentives for founders to support early-stage companies.
“I doubt Rachel Reeves’ review will be enough to bring back wealthy expats from the UAE,” said Stallone Shaikh, founder of Alliance Street Consultancy, which helps entrepreneurs set up businesses in the UAE. he said.
“For ultra-high net worth individuals, these changes are not moving the needle,” Shaikh told CNBC. “The UK is punishing people rather than encouraging them to make money.”
Personal income tax in Britain currently reaches 45% on earnings over £125,140. Capital gains tax can be as high as 24%, while the UAE offers a corporate tax rate of 0% on profits up to $100,000 and 9% above that.
What keeps expats in Dubai?
Mahesh Patel, a 60-year-old British national who moved to Dubai in 2023, helps UK clients set up business in the UAE through Melrose Consultancy. While some of his contacts discussed exit plans, Patel told CNBC he had no intention of returning.
“I’m staying here,” he added. “If anything, I might look at Bangkok, Phuket or Bali, where the cost of living is well below Dubai or the UK.”
Patel said lifestyle, schools and global connectivity remain a bigger anchor than taxes alone.
Few observers expect a large-scale repatriation of Britons from Dubai. The UAE remains attractive and many of those who left could return if the conflict subsides.
Henley & Partners, which helps the wealthy move to other countries, previously told CNBC that Dubai remains resilient but clients tend to preserve their assets. In an environment of uncertainty, options open up.
“Situations like this reinforce a core principle we often discuss with clients: the value of global optionality,” said Dominic Volek, the firm’s group president of private clients. he said.
Volek noted that “internationally traveling families” often have options in the Americas, Europe, the Middle East and Asia, adding: “These decisions are often strategic and long-term in nature rather than reactions to short-term events.”
