Are you considering a return to the UK after living in the UAE

As personal, economic or geopolitical circumstance evolve, you may be considering a return to the UK, either temporarily or permanently.  Where that return is unplanned  or accelerated, it’s important to understand how this could affect your UK tax position.

Sanctuary can help you navigate the key considerations and provide guidance to support informed and confident decision making.

UK tax residency – when do you become UK resident again?

The UK applies the Statutory Residence Test (SRT) to determine whether you are UK resident in a given tax year.

You may become UK resident again if, for example:

• you spend sufficient days in the UK
• you have ties such as accommodation, family or work in the UK
• you have a significant break from overseas work (generally a period of 31 days or more without sufficient overseas hours)
• you cease to have an overseas home and continue to have a UK home

So, where your stay in the UK is unplanned or extends longer than intended (particularly if travel is disrupted or your plans change at short notice), you could inadvertently trigger conditions for UK residence, even if this was not your intention.

Exceptional circumstances – can days be ignored?

If your time in the UK is caused by circumstances outside your control, such as regional conflict, airspace closures or safety concern, you may be able to rely on the UK’s exceptional circumstances rules. The rules allow up to 60 days spent in the UK to be disregarded, provided:

• the circumstances are genuinely exceptional and beyond your control
• you would not otherwise have remained in the UK
• you intend to leave as soon as circumstances allow

Although recent geopolitical developments may be relevant, the rules are applied strictly and require clear evidence. They will not apply where the decision to stay in the UK reflects longer term personal or commercial choices rather than the exceptional circumstances themselves.

Temporary non residence rules

If you return to the UK after a period of non residence, the temporary non residence rules may apply. These rules are relevant where:

• you were previously UK resident
• you became non resident and moved to the UAE
• you have been non resident for fewer than five full UK tax years
• you become UK resident again, even unintentionally

Where these conditions are met, certain income and gains realised while you were overseas can become taxable when you return to the UK. This may include:

• dividends taken from a company
• capital gains (for example, on shares in a private company)
• UK pension benefits accessed tax free under a treaty

If your return happens earlier than expected, amounts originally realised on the basis of continued non residence may therefore fall back into UK tax.

Central management and control

If you own or are involved in UAE companies, it’s important to consider where key decisions are made. If, following an unplanned return to the UK, you continue to manage or influence the business from the UK, there is a risk that:

• the company could be treated as UK tax resident
• its global profits could become subject to UK corporation tax

This risk can arise where:

• board or strategic decisions take place in the UK
• key commercial decisions are made from the UK because of travel or safety constraints
• there is limited evidence that management and control are exercised in the UAE

Even short periods of UK based decision making can create exposure if not carefully managed.

‍How can Sanctuary help?

With Sanctuary’s specialist insight and access to the wider Summit Group, we can help you understand what a change in circumstances might mean for your tax position and what options may be available to you. We can also advise on broader planning questions,  such as whether alternative structuring or temporary residence in another jurisdiction might be appropriate.

Visit our Tax & Advisory service page to learn more about our tax & residency advisory, or contact us for a bespoke consultation via the contact form or email us at: hello@sanctuary.ae.