Leaving the UK for Dubai: the costs nobody puts in the brochure

The United Kingdom has no exit tax. No fictional sale of your company, no bill on unrealised gains, nothing like the German Wegzugsteuer. That is genuinely good news, and it is also the reason so many people relax at exactly the wrong moment.

What the UK does instead is quieter. It keeps a hold on you through three separate rules that carry on working long after your flight has landed. None of them appear in the brochures that sell Dubai company formation.

This is the honest list.

Inheritance tax follows you for up to ten years

This is the largest single item, and it changed on 6 April 2025. Until then, the question was your domicile, a slippery concept argued over for decades. Now the test is long-term residence, and it is arithmetic.

If you were UK resident in at least 10 of the previous 20 tax years, you stay inside the UK inheritance tax net after you leave. How long depends on how many of those 20 years you were resident:

Years of UK residence (out of 20)	Years still in scope after leaving
13 or fewer	3
14	4
15	5
16	6
17	7
18	8
19	9
20	10

Inside that window, your worldwide estate is in scope at 40 percent above the 325,000 pound nil-rate band. Worldwide means what it says. The apartment you buy in Dubai Marina counts. The brokerage account you open here counts. The company you build in a free zone counts.

Someone who lived in Britain for twenty years and moves to Dubai at fifty is therefore exposed on everything they own until they are sixty. If you are below the ten-year residence threshold, the position is much lighter: only UK assets are in scope, such as a property or a bank account left behind.

What to do about it. This is one of the few cases where a term life policy written in trust, sized to the window rather than to a lifetime, is the standard answer. It is not a Dubai question, it is a UK question, and it belongs with a UK adviser before you go, not after.

Moving your pension costs 25 percent, in practice always

A UK pension can only be transferred into a Qualifying Recognised Overseas Pension Scheme. Transfer into anything else and the provider may simply refuse, or the transfer is taxed at at least 40 percent.

Transfer into a qualifying scheme and you meet the Overseas Transfer Charge of 25 percent. There is an exemption, and this is where it falls apart for Dubai: the charge is waived only when you live in the same country as the receiving scheme.

HMRC publishes the list of recognised schemes. There is no scheme in the United Arab Emirates on it. So a UK pension transferred to a scheme in, say, Malta, while you live in Dubai, is charged at 25 percent. There is no version of this that works out cheaply.

Two more details that catch people:

• A five year tail. Move away from the country of your scheme within five years of the transfer and the 25 percent becomes payable after the fact.
• A 60 day paperwork rule. If the information HMRC asks for is not supplied within 60 days of the transfer request, the transfer is taxed at 25 percent regardless.

The usual conclusion. Leave the pension where it is and draw it from the UK. The double tax agreement between the UK and the UAE deals with the taxation of the pension income itself. That is almost always cheaper than moving the pot.

Your state pension stops rising the day you leave

The annual increase to the UK state pension is only paid to people living in countries on the government’s uprating list. The United Arab Emirates is not on that list.

Your state pension is therefore frozen at the level it had when you left, or when you started claiming, and it stays there. Over a twenty year retirement, with inflation doing what inflation does, that is a larger number than most of the fees on this page combined.

Topping up your record got five times more expensive in April 2026

Voluntary National Insurance contributions are how people abroad keep their state pension record intact. Until the 2025/26 tax year, periods abroad could be covered by Class 2 contributions.

From 6 April 2026 that option is gone. Periods abroad can only be covered by Class 3:

Class	Per week	Per year
Class 2, no longer available for periods abroad	3.65 pounds	about 190 pounds
Class 3, the only remaining option	18.40 pounds	about 957 pounds

The qualifying hurdle moved too. It used to be three years of prior UK residence or three years of contributions. It is now ten.

There is a narrow transitional route for people who already applied before 6 April 2026 for the 2024/25 or 2025/26 years. If that might be you, check it now rather than next year, because it closes.

Come back within five years and the bill follows

The temporary non-residence rules exist precisely to stop people from stepping outside for a couple of years, realising a gain, and stepping back in. If you return to the UK within five years, certain income and gains you realised while abroad become taxable on your return. Dividends from a close company you controlled before leaving are the classic case.

Five years is the number to plan around. Not three, not “a couple of tax years”.

UK property: 60 days to report and to pay

If you keep a property in the UK and sell it later as a non-resident, you must report the disposal within 60 days of completion and pay any tax due in the same 60 days.

The part that catches people: the report is required even when there is no gain, and even when you made a loss. Missing it is a penalty for paperwork, not for tax.

If you rent the property out instead, the Non-Resident Landlord Scheme decides whether your agent or tenant has to withhold tax before paying you. That is worth sorting before you leave, not from six time zones away.

One thing that is genuinely simple

Your student loan does not stop because you moved. Repayments continue against overseas thresholds, and if you do not tell the Student Loans Company within three months of leaving, some plans move you onto a fixed monthly amount regardless of what you actually earn. It is a small number next to inheritance tax, but it is the one that quietly runs for years.

What this means in practice

The absence of an exit tax makes the UK look like an easy country to leave. It is easier than Germany, which taxes unrealised gains on the way out and no longer has a double tax agreement with the UAE at all. It is not, however, a clean break.

The order that works:

1. Count your years. Ten of the last twenty decides whether inheritance tax follows you at all, and the exact count decides for how long.
2. Leave the pension alone unless someone can show you, in writing, why a 25 percent charge is worth paying in your case.
3. Deal with UK property before you go, both the letting side and the eventual sale.
4. Decide whether five years abroad is realistic. If it is not, the temporary non-residence rules change the maths on everything else.

The Dubai side of this is the straightforward part. Setting up a company, getting a residence visa and an Emirates ID, and registering for corporate tax is a process with known costs and known deadlines. You can work out those costs yourself, fee by fee, in our company cost calculator, and the first year total is usually smaller than people expect.

The expensive part is the country you are leaving. We handle the UAE side, the accounting, the tax registrations and the deadlines. For the UK side, take this list to a UK adviser while you still have options, which means before the move rather than after it.

This article is part of a series comparing what leaving costs across fifteen countries. The overview, with a table of every exit charge and how long each tail runs, is in what leaving costs, by country.