International
Moving to Dubai before selling your company: what UK owners need to know
Thinking of moving to the UAE before selling your UK company? How UK residence, the five-year rule and timing decide whether the move actually saves tax.
More UK business owners are asking the same question: if I move to Dubai before I sell, can I avoid UK capital gains tax?
The honest answer is that it can work, but only if the move is genuine, the timing is right and you stay away long enough. Get any of those wrong and you can end up paying UK tax anyway, sometimes with less relief than if you'd stayed.
Why the UAE?
The UAE doesn't charge personal income tax or capital gains tax on individuals. So a UK owner who becomes non-UK resident before selling their company may pay no UK capital gains tax, and no UAE tax on the gain either.
Compare that with selling as a UK resident. Gains on shares are taxed at up to 24%, or 18% on up to £1 million of lifetime gains if Business Asset Disposal Relief applies. On a large sale, the difference can be substantial.
Step one: actually becoming non-resident
Leaving the UK doesn't automatically make you non-resident. Your status for each tax year is decided by the statutory residence test, which looks at:
- how many days you spend in the UK
- whether you work full-time abroad
- your ties to the UK: family, accommodation, UK work, and the days you've spent here in previous years
The more ties you keep, the fewer days you can spend in the UK. Owners who keep a family home here, stay closely involved in the business or visit often can find they're still UK resident, even though they've moved.
The year you leave matters too. Split year treatment can split a tax year into a UK part and an overseas part, but only if specific conditions are met.
Step two: the five-year rule
This is where many plans fail. Under the temporary non-residence rules, if you've been UK resident and you return to the UK after being non-resident for five years or less, gains you made while you were away, on assets you owned before you left, are taxed in the year you return.
In other words, selling your company in your second year in Dubai and coming back in your fourth year can leave you with a UK tax bill on the sale anyway.
Similar rules can catch large dividends from your own company paid out of profits built up before you left.
Step three: timing the sale
Even with a genuine move, timing matters:
- Contracts signed before you leave may mean the disposal happens while you're still UK resident. For capital gains tax, the date of disposal is usually the date of an unconditional contract, not completion.
- Deferred consideration and earn-outs can raise questions about when the gain arises and how it's taxed.
- Business Asset Disposal Relief is irrelevant if no UK tax is due. But if the plan fails, you may have lost the chance to claim it on the right basis.
Other points to check
- Your company's residence. If you run the company from Dubai, it could become UAE tax resident too, or create a taxable presence there. Board meetings and decision-making need planning.
- UAE requirements. You'll need proper residence in the UAE, and local advice on UAE rules, including UAE corporate tax if you set up any companies there.
- Inheritance tax. Leaving the UK doesn't end UK inheritance tax exposure straight away. Since April 2025, inheritance tax has been based on long-term residence, and it can follow you for some years after you leave.
- Your family. A spouse who stays in the UK, children in UK schools and a UK home all count as ties.
Is it worth it?
For some owners, the saving more than justifies the move, especially those who genuinely want to live in the UAE for the long term. For others, the costs, the disruption and the risk of the plan failing make it less attractive than it first seems.
What doesn't work is a short-term move made purely to sell the company tax-free. It risks the five-year rule, close HMRC scrutiny and a sale taxed with less relief than you'd otherwise have had.
Take advice before you move
The most valuable advice comes before you leave: confirming whether you'll actually become non-resident, planning the timing of the sale, and making sure the business can run from abroad without creating new problems.
This article is general information, not advice. Tax rules change and their effect depends on your circumstances. Please speak to us before acting.
