Leaving the UK for Dubai: tax, National Insurance and pensions

Is Dubai tax-free?

For an employee, largely yes. The UAE doesn't charge income tax on individuals, so nothing is taken off your salary. In the UK, income tax on the same pay runs at 20–45%, with National Insurance on top. See what you'd take home on the salary pages and what life costs on cost of living.

You do pay VAT at 5% on most things you buy. Corporate tax exists too, at 9% on business profits above AED 375,000 (≈ ₹97.3 lakh), but it's for companies and freelancers. As an individual you only come into it with business turnover above AED 1,000,000, and wages and personal investments don't count (that threshold is from PwC's tax summary, not a government page).

The catch is the UK side. Whether the UK can still tax you depends on your UK residence, decided for each tax year by the Statutory Residence Test. And some UK income, such as rent from your flat, stays taxable in the UK wherever you live.

This guide is guidance, not tax advice. The answer depends on your exact days, ties and income, so check with HMRC (opens in a new window) or a qualified tax adviser for your case. For the rest of the move, read moving to Dubai from the UK.

When you stop being UK resident: the Statutory Residence Test

The UK tax year runs from 6 April to 5 April. Since 6 April 2013 your residence for each year has been decided by the Statutory Residence Test, explained in HMRC's guidance note RDR3 (opens in a new window). You work through it in order:

1. 1

   Are you automatically non-resident?

   Yes, if one of the automatic overseas tests applies: fewer than 16 days in the UK in the tax year if you were UK resident in one or more of the previous 3 tax years, fewer than 46 days if you weren't, or full-time work abroad (next section).
2. 2

   Are you automatically UK resident?

   If no overseas test applies, you're resident if you spend 183 days or more in the UK in the tax year. RDR3 lists the other automatic UK tests.
3. 3

   If neither, count your UK ties

   The sufficient ties test weighs your days in the UK against your ties to it: a family tie, an accommodation tie, a work tie, a 90-day tie and, for people leaving, a country tie. RDR3 defines each one. The more days you spend in the UK, the fewer ties it takes to keep you resident.

For someone who was UK resident in one or more of the previous three tax years, how many ties make you resident depends on your days in the UK:

• 16–45 days in the UK: resident with 4 ties or more.
• 46–90 days: resident with 3 ties or more.
• 91–120 days: resident with 2 ties or more.
• Over 120 days: 1 tie is enough.

Full-time work abroad: the test most movers use

The third automatic overseas test is the one built for people who move for a job. You're non-resident for the tax year if you work full-time abroad, spend fewer than 91 days in the UK, and work in the UK on no more than 30 of those days.

• Full-time means an average of at least 35 hours a week over the year, worked out HMRC's way (its manual, RFIG20150, shows the calculation).
• A UK work day is a day you work more than 3 hours in the UK. Keep a log of any work you do on a visit home, even from a laptop.
• No significant break: no gap of 31 days or more without overseas work, not counting leave.

Keep your contract, payslips and a diary of your travel and work days. They are your evidence if HMRC asks. HMRC's tax if you leave the UK (opens in a new window) page puts the same test in plain words.

Your leaving year: split year treatment

Most people leave part-way through a tax year, and you're usually still UK resident for that year. Split year treatment divides it: a UK part, taxed as normal, and an overseas part, when your Dubai pay isn't taxed in the UK.

For someone starting full-time work abroad (HMRC's Case 1 (opens in a new window)), you must be UK resident for the tax year and the year before, and non-resident the year after because you meet the full-time work test. The overseas part starts on the first day you work more than 3 hours overseas.

In the overseas part the full-time work test applies with lower limits, reduced for the months that have passed. Start work abroad between 6 and 30 April and you can spend up to 90 days in the UK in the rest of the year, working on up to 30. Start in September and it's 52 days and 17 work days; start in October and it's 45 and 15. HMRC's table for every month (opens in a new window) has the rest.

Telling HMRC you've gone: P85 or Self Assessment

1. 1

   If you don't file Self Assessment: form P85

   P85 (opens in a new window) tells HMRC you've left the UK and lets you claim back any tax overpaid in your leaving year. Before you leave it must be printed and posted; once you've gone you can send it online.
2. 2

   If you file Self Assessment

   You don't need a P85. Report leaving on your return for that year, with the residence pages (SA109). HMRC asks for those by post, so the paper deadline applies: 31 October after the tax year ends.

What the UK can still tax: rent, gains and ISAs

Non-residents still pay UK tax on UK income. What that means for most movers:

• Rent. You're a non-resident landlord if you live abroad for 6 months or more a year. If there's no letting agent and the rent is over £100 a week, your tenant must take tax off before paying you, unless HMRC approves you to be paid in full: apply on form NRL1i. How it works (opens in a new window).
• Your Personal Allowance. British citizens living abroad keep the UK Personal Allowance, so a small UK income can still be tax-free.
• ISAs. You can keep your ISA while you're non-resident, but you can't pay in. The allowance is £20,000 for 2026/27, for when you're back.
• Gains if you come back soon. If you return after 5 years or less, having been UK resident in at least 4 of the 7 tax years before you left, gains and some income from your time away can be taxed when you return (temporary non-residence).
• The 4-year foreign income and gains regime, which replaced the remittance basis on 6 April 2025, only helps people who come back after at least 10 years of non-residence.

National Insurance and your State Pension after April 2026

Once a Dubai employer pays you, UK National Insurance stops. Class 1 carries on abroad only in limited cases, and then for at most 52 weeks. The UAE has no social security agreement with the UK, so years in Dubai don't count towards your UK record.

Gaps cut your State Pension. The full new State Pension is £241.30 a week from 6 April 2026 and needs 35 qualifying years; you need at least 10 for any at all. What changed on 6 April 2026, announced at Budget 2025:

• You can't pay voluntary Class 2 for time abroad any more. It was the cheap option, at £3.65 a week for 2026/27.
• Class 3 is the only option, at £18.40 a week: about £767 a year more than Class 2, by HMRC's own count.
• To pay Class 3 for time abroad you need to have lived in the UK for 10 years in a row, or paid 10 years of qualifying contributions in total. Credits and earlier voluntary contributions for time abroad don't count. For 2025/26 and earlier it was 3 years.
• If you applied for 2024/25 or 2025/26 by 5 April 2026, you can still apply for 2026/27 under the old rule until 5 April 2027.
• HMRC puts the number of people abroad who lost Class 2 at about 46,000.

Apply from abroad on form CF83. You can usually fill gaps from the past 6 years, so you don't have to decide on day one. See voluntary National Insurance if you live abroad (opens in a new window) and the current rates (opens in a new window).

If you retire in the UAE, expect your State Pension not to rise each year. It goes up abroad only in the EEA, Gibraltar, Switzerland and countries with an agreement, and the UAE isn't on those lists. That's our reading of the DWP's lists: its page doesn't name the UAE. Paid into an overseas account, it also carries a conversion charge of 0.39%. State Pension if you retire abroad (opens in a new window).

Your UK workplace and personal pensions stay where they are. Dubai employers pay an end-of-service gratuity instead of pension contributions, so plan your own saving. Moving a pension abroad can trigger tax charges: get regulated advice before any transfer.

Student loans and Child Benefit

Your student loan doesn't stop when you leave. Tell the Student Loans Company if you leave the UK for more than 3 months, and send it your Dubai income each year. It sets thresholds for each country; the UAE's for 2026/27 are:

• Plan 1: you repay on income above £21,520 a year, or a fixed £342 a month.
• Plan 2: you repay on income above £23,510 a year, or a fixed £327.20 a month. Interest rises with income up to £42,310.
• Plan 5: you repay on income above £20,000 a year, or a fixed £353.60 a month.

The fixed amount is what you're charged if you don't give the SLC the information it needs, so answer its letters. Plan 4 and postgraduate loans have their own tables. Start at repaying your student loan (opens in a new window).

Tell the Child Benefit Office if you're going abroad for more than 8 weeks. It carries on longer only in the countries HMRC lists, and the UAE isn't one of them, so expect it to stop (our reading of HMRC's Child Benefit abroad (opens in a new window) page).

Proving UAE residence: the tax residency certificate and the treaty

The UK and the UAE have a double taxation convention (opens in a new window), signed on 12 April 2016 and in force from 25 December 2016. It decides which country counts as your residence if both could, and which one taxes income the treaty covers.

To prove your UAE residence, for the treaty or to a UK bank or pension provider, ask the Federal Tax Authority for a tax residency certificate. Under Cabinet Decision 85 of 2022 you're UAE tax resident if you're in the country for 183 days in a 12-month period, or 90 days if you hold a residence permit and have a home or a job there. Those rules apply from 1 March 2023.

The certificate costs AED 500 (≈ ₹13,000) (electronic), plus an AED 50 submission fee and AED 250 for each printed copy. It takes about 10 business days once your application is complete. Apply on the FTA's site (opens in a new window). You'll need a UAE bank account for most things anyway: see opening a bank account in Dubai.

Rules change each tax year, and your situation may have details this guide doesn't cover. Before you rely on it, check with HMRC or a qualified adviser.

Sources

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