Wealthy Britons looking to escape Gulf amid Iran-US war avoid returning to UK over tax hit
Wealthy Britons who want to escape the impact of the Iran-US conflict in the Gulf are said to have taken refuge in other European countries to escape huge tax bills.
Approximately 300 thousand British citizens live in the Gulf countries, which were the target of missile and drone attacks following Donald Trump’s attack on Iran last month. According to Foreign Secretary Yvette Cooper, 102,000 British citizens have registered their presence in the region with the government’s security system.
But residents of the United Arab Emirates and other nearby countries have been warned that HMRC are unlikely to be “understanding” of requests to be exempt from paying additional tax if they return to the UK.
UK tax rules allow “non-residents” to pay tax only on their UK income. A person may be considered a non-resident if they have spent less than 16 days in the UK, or less than 46 days if they were non-UK resident in the previous three tax years, or if they worked full-time abroad and spent less than 91 days in the UK. The tax year restarts in April, meaning many wealthy people will have already exhausted their allowances.
Nimesh Shah, managing director of consultancy firm Blick Rothenberg, said: Independent He said he had received a number of calls from people wanting to leave the Gulf and asking if they could return to the UK.
“From a tax perspective, we need to seriously caution about going back to day counts. Because if they’re planning their tax affairs in a way that they’re no longer a taxpayer in the UK, by going back to the UK and spending days here, those will all count for days counts in terms of our UK tax law and whether someone is resident or not.”
Guard, The newspaper, which first reported the story, said high-net-worth individuals were looking to flee to countries such as France or Ireland instead.
Mr Shah told the publication: “I told them not to rely on HMRC’s exceptional circumstances provisions. I can’t imagine HMRC being very understanding about that.”
He added: “There are UK taxpayers who have decided to leave for places like the UAE. According to HMRC, they have chosen to go there to avoid paying tax in the UK. They will not give you the green light to spend more time here and not pay tax.”
There is a provision in existing law to prevent a person from leaving the United Kingdom in exceptional circumstances. An example given in the rules is the formation of a volcanic ash cloud and the suspension of flights out of the country.
But Mr Shah said: “When I talk to customers my view is always to say ‘don’t rely on this’. It’s very subjective. HMRC tend to want to use these things to their advantage and you choose to come to the UK.”
“It’s up to you where you go. You don’t need to go to the UK. You can go to many other places in peacetime.”
Last week, it was reported that British social media influencers living in Dubai were reluctant to return to their country due to fear of taxation.
One business owner quoted in The Guardian said he would spend time in Dublin until the end of the 2025-26 tax year because he did not want to pay UK capital gains tax on a business he sold “many years ago”.
Sir Ed Davey, leader of the Liberal Democrats, criticized “washed footballers and tax exiles” seeking protection from the UK in Dubai earlier this month.
Addressing Parliament, he said: “We rightly expect our armed forces to protect British citizens around the world in crises such as these.”
“But that includes tax exiles like Isabel Oakeshott and washed-up old footballers who make fun of the ordinary people who pay our taxes here.”
