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I've sat across the table from a lot of British expats in Dubai who tell me the same thing.
They left the UK years ago, they don't pay a penny of income tax here, and as far as they're concerned, the taxman back home has nothing left to say to them.
For most of my career that assumption was wrong for one reason: domicile.You could live in the UAE for twenty years and still be treated as UK domiciled, which meant your worldwide estate stayed exposed to UK inheritance tax at 40%.
That rule no longer exists.
From 6 April 2025 the UK scrapped domicile as the test for inheritance tax and replaced it with residence. It's one of the biggest shifts in UK tax planning I've seen in twenty years of doing this, and most of the expats I speak to in Dubai haven't caught up with it yet.
Get this part of your planning wrong and it tends to be expensive, which is exactly why good financial advice in Dubai starts with knowing where you actually stand under the current rules, not the rules you remember from when you first moved out here.
What changed: from domicile to long-term residence
Domicile used to be the anchor for UK inheritance tax.
Broadly, it followed your father's home at the time you were born, and it was notoriously hard to shake off, even after decades abroad. Residence, on the other hand, is something HMRC can measure in days and years.
Under the new rules, you're treated as a long-term UK resident, and therefore exposed to IHT on your worldwide estate, once you've been UK tax resident for ten consecutive tax years, or ten of the previous twenty tax years.
Spend less time than that as a UK resident, and only your UK-situated assets fall within the net.
This matters because it's no longer a question of where your father considered home, or how hard you've tried to formally sever your UK ties. It's a residency count anyone can work out. For long-term Dubai expats who left the UK well over a decade ago, that's often genuinely good news.
How long does UK inheritance tax exposure follow you after you leave?
This is the part people miss. Becoming non-resident doesn't switch off your IHT exposure overnight. There's a tail.
If you qualified as a long-term resident before leaving, your worldwide estate can remain inside the scope of UK IHT for between three and ten years after departure, depending on how long you lived in the UK in the first place.
The longer your UK residency history, the longer the tail. Someone who lived in the UK for ten to thirteen years drops out of scope three years after leaving; someone who lived there for twenty years or more can carry a tail of up to ten years.
The detail is set out by HMRC's own guidance on long-term UK residents, and it's worth reading before you assume you're clear.
UK-situated assets are a separate matter entirely. Property, certain UK company shares and other UK-sited wealth stay within the scope of UK inheritance tax regardless of where you live or how long you've been away.
What the change means for trusts you've already set up
If you set up an offshore trust years ago specifically to keep non-UK assets out of the inheritance tax net, the ground has moved under you and it's worth understanding how.
Before April 2025, whether trust assets were excluded from UK IHT depended on the settlor's domicile at the point the assets went into trust.
Now it depends on whether the settlor is a long-term resident at the time of a chargeable event, things like the ten-year anniversary of the trust, a capital distribution, or death. The trust's IHT status can change over the settlor's lifetime as their own residency history changes.
Trusts settled before 30 October 2024 carry some transitional protection from the gift with reservation rules, but they're not protected from the ten-year periodic charge if the settlor is, or becomes, a long-term resident.
In practice this means trust structures that were watertight under the old domicile rules need a proper review, not an assumption that what worked in 2015 still works today.
What is a trust, and why do international families in Dubai still use them?
A trust is a legal arrangement where one party, the trustee, holds and manages assets on behalf of beneficiaries, according to instructions set out by the person who created it, the settlor, usually in a trust deed or will.
Trustees are the legal owners of the assets and are responsible for managing them properly. They can be individuals or a professional trust company.
The settlor's wishes guide how and when assets are distributed, but once a trust is properly constituted, the settlor generally gives up direct control.
For expat families, trusts are still useful tools. They're not, and were never, a way to avoid all UK tax simply by virtue of holding assets offshore.
What they offer is a structured way to pass wealth down, protect it from disputes over a will, and in the right circumstances, manage exposure to inheritance tax under the current rules rather than the rules that existed a decade ago.
As with any part of investing for the long term, a trust only earns its place in the plan if it's structured around what you're actually trying to achieve.
What are the main types of trust used in estate planning?
There are a handful of structures that come up repeatedly in expat financial planning.
A bare trust, sometimes called an absolute trust, gives the beneficiary an immediate and unconditional right to both the capital and the income. Once it's set up, the beneficiaries can't be changed. These are commonly used to hold assets for children until they reach adulthood.
An interest in possession trust gives one beneficiary, the life tenant, an automatic right to the income the trust generates, while the capital ultimately passes to someone else, the remainderman, usually after the life tenant's death.
A discretionary trust hands the trustees real flexibility. They decide when payments are made, to whom, how often, and on what conditions, which makes this structure useful when you want to protect beneficiaries from receiving wealth too early, or from losing it in a divorce or bankruptcy.
In practice, families often combine more than one type, sometimes alongside a discounted gift trust or a loan trust, to build a structure that balances inheritance tax planning against the need to retain some access to capital or income.
There's no single right answer here. It depends entirely on the family's goals, and it's not something to design without proper advice.
Do you actually need a trust?
Not every expat family does, and I'd rather tell someone honestly that they don't need one than sell them a structure for the sake of it.
A trust is worth considering if you have significant assets and want certainty over who inherits and when, if you want to avoid the cost and delay of probate, if you're concerned about a will being contested, or if you want to protect a beneficiary who might otherwise lose an inheritance early, through poor decisions, coercion, or a relationship breakdown.
It's also worth considering as part of a broader inheritance tax strategy, particularly now that the rules have shifted from domicile to residence.
The right structure depends entirely on your residency history, where your assets sit, and how long you intend to stay outside the UK.
That's not a decision to make from a generic checklist. It needs a planner who understands both your personal situation and the post-2025 rules in detail.
The other UK tax obligations that don't disappear when you move to Dubai
Inheritance tax gets the headlines, but it's rarely the only thing catching expats out.
The pattern I see most often with British clients in Dubai is a false sense of security: no income tax in the UAE gets mistaken for no tax obligations anywhere.
If you haven't formally broken UK tax residency, perhaps because you're still spending more time in the UK than you realise, you can remain liable for tax on your worldwide income, not just your UK-sourced income.
Whether you're UK resident in a given tax year comes down to the Statutory Residence Test, which weighs days spent in the UK against your ties to the country: family, accommodation, work, and how much time you spent there in prior years.
Even once you are clearly non-resident, certain UK income keeps following you.
Rental income from a UK property is taxable in the UK regardless of where you live, and landlords letting property while abroad need to register under the Non-Resident Landlord Scheme and file returns accordingly.
Capital gains on UK property are also chargeable for non-residents, and gains on other UK assets can become retrospectively taxable if you return to the UK within five years of disposal.
None of this is exotic. It's standard cross-border tax that catches people out simply because nobody told them clearly, or because the advice they got was years out of date.
What are the current UK income tax, capital gains tax and inheritance tax rates?
For the 2026/27 tax year, the UK personal allowance is £12,570, and it tapers away entirely once income reaches £125,140.
Above the allowance, income is taxed at 20% up to £50,270, 40% up to £125,140, and 45% above that, according to GOV.UK's current income tax rates.
Capital gains tax for higher and additional rate taxpayers sits at 24% on most assets, including residential property, following the rate increase brought in from October 2024.
Inheritance tax remains 40% on the value of an estate above the nil-rate band of £325,000, with relief available for assets passed between spouses and for charitable gifts.
None of these figures are static.
UK tax thresholds have been frozen for several years running, which quietly drags more people into higher bands as their income grows, a process often called fiscal drag.
Anyone planning around current numbers needs to revisit that plan regularly, not treat it as fixed once and done.
Property: the tax exposure that never really leaves you
If you've kept a buy-to-let in the UK while building a life in Dubai, property is usually where the most avoidable mistakes happen.
Rental profits are taxable in the UK whether you live there or not, and the rules around what you can deduct, particularly finance costs on mortgaged property, have tightened considerably over the past several years.
Selling the property brings capital gains tax into play too, and the timing of a sale, particularly around a move back to the UK, can materially change what you owe.
The mistake I see most isn't ignorance of these rules in isolation.
It's failing to look at property, pensions, investments and inheritance planning as one connected picture, which is the whole point of working from a proper financial planning guide rather than treating each decision in isolation.
A decision that looks sensible for the property on its own can create an unnecessary tax drag somewhere else in the plan.
Planning to move back to the UK? Timing decides how much it costs you
Repatriation is where I see some of the most expensive, and most avoidable, mistakes.
The moment you become UK resident again, you're back in the system for worldwide income and gains.
Decisions made in the months either side of that date can have an outsized effect on what you owe.
Disposing of assets, drawing pension benefits, or realising gains before you become UK resident again can, in the right circumstances, materially reduce your tax exposure compared to doing the same thing a few months later.
This is part of why retirement planning for expats has to account for tax timing, not just investment performance.
This isn't about gaming the system. It's about not stumbling into an unnecessary bill simply because nobody planned the sequence of events around your return.
If repatriation is even a possibility in the next few years, the planning needs to start well before you book the flights, not after you've landed.
Why this isn't a do-it-yourself exercise anymore
I'll be straightforward about why I'm writing this rather than leaving you to read HMRC guidance directly.
The rules changed in April 2025, in a way that affects almost every British expat with assets, trusts, or ongoing UK ties.
Most of the people I talk to are working from an outdated mental model, often one they built years ago and never revisited.
A good international tax adviser earns their keep here by doing three things: working out where you actually stand under the current residence-based rules, structuring your assets so you're not paying more than the law actually requires, and keeping that plan current as the rules keep evolving, because they will.
Past performance and past advice are not a guide to future tax outcomes, and that's particularly true right now given how much has changed in the last two years.
If you're weighing up whether you actually need a financial adviser in Dubai for something this specific, the honest answer for most people in this position is yes, simply because the cost of getting it wrong dwarfs the cost of proper advice. It's an honest reflection of how complicated this area has become, and how expensive it is to get wrong.
Where this leaves you
If you're a British expat in Dubai with assets, property, or a trust set up years ago, the honest starting point is to work out where you actually sit under the post-2025 residence rules, not where you assumed you sat under the old domicile test.
For some people that means meaningfully less UK inheritance tax exposure than they feared. For others, particularly those who've spent more time in the UK in recent years than they realise, it means more exposure than they expected.
Either way, this isn't something to leave to guesswork or out-of-date advice from a decade ago. The rules have moved. Your plan should move with them, and that's exactly what proper wealth management in Dubai is supposed to do.
If you'd like to talk through what the residence-based IHT rules mean for your situation, book a 15-minute discovery call.
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