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Guidance Note for the Statutory Residence Test (RDR3) : Dubai Free Zone Company Setup Cost

Guidance Note for the Statutory Residence Test (RDR3)

Is This You?

You’ve built a successful UK business — £500K, £1M, maybe £2M in annual profits.
But every April, HMRC takes a bigger bite:

25% corporation tax on company profits

39.35% dividend tax if you pay yourself

Up to 45% personal income tax

You’ve looked at Dubai and its 0% tax regime. But one question keeps you awake at night:
“If I move to Dubai, will HMRC still tax me?”

Real Prompts This Blog Answers

How many days can I spend in the UK without being taxed?

What is the Statutory Residence Test (SRT), and how does it apply to me?

Do I need to give up my UK passport to pay 0% tax in Dubai?

What happens if HMRC audits me after I move?

The Problem

Leaving the UK tax system isn’t as simple as buying a ticket to Dubai. HMRC’s Statutory Residence Test (SRT) decides whether you’re still “UK resident for tax.”

The rules are complex:

  • Day counts (16, 46, 90, 183) with exceptions
  • Ties to the UK (home, family, work, prior residency)
  • Split year treatment if you leave mid-tax year

If you get this wrong, you could face double taxation or even an HMRC investigation.

The Clean, Compliant 5-Step Framework

Step 1: Assess Your SRT Position

Review day-count thresholds
Identify “automatic non-residence” vs. “sufficient ties”
Decide the exact date you’ll cease UK tax residency

Step 2: File the Right UK Paperwork

Complete form P85 when leaving the UK
Secure split-year treatment where applicable

Step 3: Establish Dubai Residency

Apply for a UAE residency visa (business, property, or golden visa)
Open a local utility bill or lease to prove ties

Step 4: Relocate Your Company Structure – Company Setup in Dubai Free Zone

Shift your UK Ltd under a UAE HoldCo
Extract retained profits tax-free via the Dubai entity

 Here’s where entrepreneurs often ask about the Dubai free zone company setup cost, whether to form a company in free zone Dubai, or how to setup company in Dubai free zone to maximise compliance and efficiency.

Step 5: Secure Banking and Compliance

Open UAE bank accounts
Align bookkeeping and filings for UK exit and UAE entry

Supporting Details and Strategies

Exceptional Circumstances: COVID, family emergencies and other conditions can extend UK day counts, but they must be documented.

Family Relocation: Spouse and children affect your “ties” score.

Trusts and Assets: HNW families need cross-border structuring to avoid IHT exposure. Here, working with inheritance tax specialists UK ensures you don’t trip over the inheritance tax threshold UK while optimising your relocation plan.

Case Study: £1.2M Profits, £480K UK Tax → £0 Dubai Tax

James, a UK SaaS founder, earned £1.2M profits annually.

In the UK: After corporation, dividend, and income taxes, he lost ~£480K per year.

With Dubai Shift: Clean SRT exit, Dubai residency, and new HoldCo structure.

Outcome: £0 tax legally, £480K reinvested yearly into growth and family wealth — including exploring small investment in Dubai opportunities to diversify income.

Why Dubai Shift?

Big 4 firms will charge £50K+ for structuring, then leave you to navigate visas and banking alone. Online “company setup in Dubai” agents only sell you a trade license.

At Dubai Shift, we bridge the gap:

  • Tax and structuring expertise (UK → UAE)
  • Residency and family relocation handled end-to-end
  • Concierge banking and compliance so you don’t fall foul of HMRC

We don’t just move you to Dubai. We transform your tax, your lifestyle, and your legacy.

Final Word from Haseena

I know how daunting this feels. I’ve seen founders hesitate for years — losing hundreds of thousands in unnecessary UK tax because they didn’t know how to make the move safely.

That’s why I built Dubai Shift: to give you a clean, compliant, complete pathway to 0% tax and global freedom.

What Next?

Take our free Wealth Reclaimed Scorecard — find out which relocation path fits you

Book a Private Strategy Call — let’s map your 90-day exit plan

This article is part of Dubai Shift’s premium series on UK-to-Dubai tax migration, covering SRT compliance, UK company relocation, and cross-border structuring. Explore more at: https://dubaishift.com

Frequently Asked Questions

No — residency is about where you live, not citizenship.

It depends on your SRT ties. Many high earners target under 46 days.

Yes, but a clean SRT exit plus Dubai residency makes your case airtight.

If you keep a home in the UK, it counts as a “tie.” Solutions include renting or restructuring ownership.

Yes — for personal income, dividends, and capital gains. There is a 9% corporate tax, but with the right company in free zone Dubai or free zone structure, it can be avoided.

Costs vary by jurisdiction (e.g., IFZA, DSO, DMCC), but starting a company setup in Dubai is often far more cost-efficient than paying UK taxes.

That’s where inheritance tax specialists UK ensure your estate plan is compliant and efficient, even after relocating.

Haseena from Dubai
Haseena from Dubai
A founder, a Dubai insider, globally seasoned. Writing to you from the city I’ve always called home — but now see with fresh eyes.
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