Moving Your Business to Dubai: UK Tax Planning and Important Considerations

Is This You?

You’re a UK business owner with six or seven-figure profits.
You’ve thought about moving your business to Dubai.

But you’re worried HMRC won’t let you go cleanly.

You’ve heard horror stories about double tax, exit charges, and audits.

You want certainty — not loopholes.

Real Prompts This Blog Answers

• Will HMRC still tax me if I move my company to Dubai?
• What’s the clean way to break UK tax residency?
• How do I avoid double taxation on profits?
• Do I need to dissolve my UK Ltd?
• Can my family move with me, and does that affect tax?

Why Tax Planning Matters Before Relocation

Most blogs about “moving your business to Dubai” talk about freezones and office space. That’s the easy part.

The hard part is UK tax exit. Without a clear plan, you risk:

• Triggering UK exit charges (capital gains on company value).
• Remaining UK tax resident under the Statutory Residence Test.
• Losing retained profits to dividend tax.
• HMRC scrutiny if your filings don’t match your move.

This is where professional tax advice UK becomes essential.

Step 1: Break UK Tax Residency (SRT)

• Analyse your day count + UK ties.
• File Form P85 and consider split-year treatment.
• Document all steps to withstand an audit.

Fail this step and HMRC can still tax your Dubai company.
🔗 Related: Statutory Residence Test UK: A Complete Guide

Step 2: Choose the Right Dubai Entity

• Freezone company: 100% foreign ownership, 0% tax.
• Mainland entity: only if trading locally.
• Holding company: structure to extract profits tax-free from UK Ltd.

The wrong entity choice = tax traps or banking rejection. Many founders look into how to setup a company in Dubai, but without compliance, HMRC may still classify them as UK tax resident.
🔗 Related: Everything You Need to Know About Moving Your UK Business to Dubai

Step 3: Plan Retained Profits Extraction

• Transfer your UK Ltd under a Dubai HoldCo.
• Extract profits as exempt dividends.
• Use those funds for global reinvestment such as Dubai property investment or diversified assets.

Done wrong, HMRC will tax your “dividends” at up to 39.35%.
🔗 Related: How UK Business Owners Can Access Retained Profits by Moving to Dubai

Step 4: Consider Exit Charges & Double Tax Risks

• Some UK exits trigger deemed disposals (exit tax).
• Without treaty planning, you risk double taxation.
• Dubai structuring avoids both with compliant design.

Ignore this and your “tax-free” move may come with a surprise HMRC bill.

Step 5: Secure Family & Lifestyle Alignment

• Move your family with you — HMRC counts family ties.
• Relocate housing, schools, and banking.
• Draft DIFC wills to cover your estate, including trusts and inheritance tax considerations.

If your family stays in the UK, HMRC may still call you UK resident.
🔗 Related: Moving to Dubai with Kids: All You Need to Know

Supporting Strategies

• Timing is critical: align your move with the UK tax year.
• Banking introductions are gold: many UAE banks reject new entities without guidance.
• Audit-proof filings: keep evidence of SRT and corporate changes.

Case Study: The Clean Exit

A founder with £1.5M profits tried to set up in Dubai without planning. HMRC deemed him UK resident, hitting him with:

• £420K UK tax bill.
• Audit costs and penalties.

Another founder used Dubai Shift:

• Broke residency cleanly under SRT.
• Set up a Dubai HoldCo.
• Extracted £1.8M retained profits tax-free.
• Saved £500K annually, later choosing to invest in Dubai real estate for both lifestyle and returns.

Why Dubai Shift?

ESDG and others talk tax theory. We deliver execution:

• SRT + P85 planning.
• Freezone / HoldCo structuring.
• Banking + residency alignment.
• Family relocation + compliance oversight.

We’re not checklist writers. We’re your survival team.

Final Word from Haseena

“Moving your business to Dubai without tax planning is like sailing without a compass. You’ll get lost, and it’ll cost you. At Dubai Shift, we map the route, set the sails, and land you safely.”

What Next?

• Take The Wealth Reclaimed Scorecard
• Book a Private Strategy Call

This article is part of Dubai Shift’s premium content series on UK-to-Dubai migration, covering tax exits, retained profits, and compliant structuring. Explore more at: https://dubaishift.com

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.