International tax planning for expats | Expert tax structuring solutions

Expatriate and international tax planning

Tax often represents the biggest financial outlay over the course of your entire lifetime.

Ensuring you don’t pay more than is due can be difficult.

Whether to help meet increasingly complex tax obligations, to help you plan ahead for your future and your family's future, or to understand the tax treatment of specific products or structures, e.g., an offshore investment bond - our specialists advisers can assist you.

What is international tax planning and why does it matter for expats?

International tax planning is the process of legally organising your income, assets, and financial affairs across multiple countries to minimise tax liabilities and stay compliant with all relevant tax laws.

For expats, especially those living in low-tax countries like Dubai, it matters because:

You may still have tax obligations in your home country
Global income, property, pensions, and investments can trigger cross-border tax issues.
Without financial planning, you risk double taxation, missed reporting, or unnecessary tax exposure.

In short, international tax planning helps expats protect wealth, avoid penalties, and make the most of global opportunities. For expats living in Dubai, it's especially important to seek guidance from a certified financial adviser based in Dubai. They understand the nuances of local and international tax laws, ensuring that your tax strategy is aligned with your personal circumstances and goals. This proactive approach helps you avoid costly mistakes and make the most of tax-saving opportunities while keeping your finances secure.

Key tax challenges faced by expats living in Dubai

1. False sense of tax exemption - expats often assume they have no reporting obligations elsewhere, which can lead to costly errors—especially for UK, US, and EU nationals.

2. Home country tax residency - if you haven’t broken tax residency correctly (e.g. via the UK Statutory Residence Test), you could be taxed on worldwide income back home.

3. Unreported foreign income - income earned abroad may still need to be declared.

4. Inheritance & estate tax exposure - for example, UK expats may still be subject to UK Inheritance Tax (IHT) if they remain UK-domiciled—even after many years abroad.

5. Double taxation risks - while the UAE has double taxation agreements (DTAs) with many countries, you must apply treaty rules correctly to avoid overpaying.

6. Rental income from abroad - UK expats must register under the Non-Resident Landlord Scheme, file returns, and pay UK tax—even while living tax-free in Dubai.

7. Capital Gains Tax on foreign assets - UK expats, for instance, may face CGT on UK property or even on non-UK assets if they return within 5 years.

8. Foreign account reporting - many expats overlook global financial reporting rules.

9. Pension and investment complexity - managing UK pensions, ISAs, or offshore investments can trigger unexpected tax implications or limits on contributions and tax relief.

10. Poor exit/repatriation planning - moving back home without tax planning may expose you to major liabilities. Timing asset disposals or pension withdrawals poorly can lead to a significant tax hit upon return.

How international tax structuring helps expats optimise tax efficiency

Legally organising your income, assets, and residency status across different countries can reduce your overall tax liability. This can include:

Choosing tax-friendly jurisdictions for residency or company setup
Utilising tax treaties to avoid double taxation
Taking advantage of exemptions and exclusions
Strategically timing income and asset transfers
Separating personal and business finances using offshore entities or trusts

International tax structuring – strategies for expats in Dubai

The importance of tax structuring for UK expats

1. Avoiding double taxation

2. Managing UK tax residency rules

3. Protecting foreign income and assets

4. Capital gains and inheritance tax planning

5. Optimising pension and investment withdrawals

6. Ensuring compliance

International tax adviser – why expats in Dubai need expert guidance

The role of an international tax adviser in cross-border tax planning

For British expats living in the United Arab Emirates, where there's no personal income tax, it might seem like tax planning is no longer necessary. But in reality, UK tax obligations and global reporting rules still apply - and the role of an international tax adviser becomes essential for managing your cross-border finances effectively.

How AES provides tax solutions for uk expats in Dubai

Successful executives usually end up paying a lot more in taxes than they owe since they are not advised correctly. Tax and trust planning is an important part of your financial planning process and should not be overlooked.

It’s important to consider whether international trusts have a role to play in your offshore financial planning.

Whilst taxation is a fact of life, there is no law in any land that says you must pay more than you owe! And yet, that is what so many expats end up doing, simply because they have failed to plan effectively, or perhaps don’t even understand their liability for tax.

If you’re a British expat – or have assets in the UK – your beneficiaries may be liable for UK inheritance tax for example - potentially on your worldwide estate.

And there’s more to tax than just inheritance tax, there’s capital gains, income tax at home and abroad. Your financial planning needs to look at ways you can legally mitigate your tax burden, so that excessive taxation doesn’t undermine your overall financial plan.

Avoiding double taxation and ensuring compliance with home country tax laws

1. Understand your tax residency

2. Use Double Taxation Agreements

3. Declare all relevant income

4. Get professional help structuring your income and assets efficiently

5. Submit the necessary returns and disclosures

Expat tax planning for UK citizens in Dubai

How UK expats in Dubai can manage tax obligations efficiently

1. Managing UK tax obligations while abroad

Even if you're living tax-free in Dubai, you may still have to deal with UK tax rules:

You may still be UK tax resident depending on how much time you spend in the UK.
UK income sources (e.g., property rental, dividends, pensions) remain taxable.
An adviser helps determine your UK tax residency status using the Statutory Residence Test and ensures you don’t unintentionally trigger tax liabilities.

2. Avoiding double taxation

The UK and UAE have a double taxation agreement (DTA). A tax advisor can:

Help you claim treaty benefits if needed.
Ensure you don’t pay UK tax unnecessarily on income already taxed elsewhere.
Advise on Foreign Tax Credit relief where applicable.

3. Optimising your tax residency

To reduce exposure to UK taxation, many expats aim to become non-UK tax residents.

A tax adviser helps:

Structure your time in and out of the UK properly.
Avoid triggering temporary non-residency rules (which can lead to back taxes if you return within 5 years).
Secure your position through evidence and planning, especially for high-net-worth individuals.

4. Tax-efficient asset and income structuring

British expats often hold:

UK property
Offshore investments
International pensions

An adviser ensures these are structured to:

Minimise UK tax liabilities
Avoid unnecessary reporting
Manage capital gains, dividend, and inheritance taxes

5. Reporting and disclosure

Even while in the UAE, you may need to:

Report foreign income to HMRC
File tax returns if you have UK income
Disclose offshore accounts under Common Reporting Standard (CRS)

A tax adviser ensures you stay compliant and avoid penalties for failing to disclose income or assets.

6. UK property tax planning

If you rent out UK property while living in Dubai:

You'll still owe UK income tax on rental profits.
You may also face Capital Gains Tax (CGT) if you sell the property.
Non-residents are subject to UK Non-Resident Landlord (NRL) Scheme.

An adviser can help you:

Maximise allowable expenses
Time disposals strategically
Avoid pitfalls like non-resident CGT traps

7. Inheritance tax exposure

Even as a long-term resident of the UAE, you may still be considered UK domiciled, meaning your entire worldwide estate could be subject to UK Inheritance Tax (up to 40%).

A tax adviser can help with:

Estate planning
Using trusts, insurance, or gifting strategies
Potentially severing UK domicile over time

8. Planning for repatriation

If you plan to return to the UK:

Timing matters - income received just before or after moving could be taxed differently.
Selling assets before becoming UK resident again may reduce tax exposure.
A tax adviser helps structure your return to minimise UK tax on repatriated income, gains, or pensions.

The UK Statutory Residence Test and its impact on expats

The UK Statutory Residence Test (SRT) is the official method HMRC uses to determine whether you're UK tax resident in a given tax year. It’s particularly important for expats because your residency status directly affects whether you're taxed on your worldwide income or only your UK-sourced income.

The SRT is made up of three parts:

1. Automatic Overseas Test

You’re non-resident if you meet certain conditions, like:

Spending fewer than 16 days in the UK (if previously UK resident)
Spending fewer than 46 days in the UK (if non-resident for the past 3 tax years)
Working full-time abroad and spending fewer than 91 days in the UK (with limited workdays in the UK)

2. Automatic UK Residence Test

You’re UK resident if:
You spend 183 days or more in the UK, or
Your only home is in the UK, or
You work full-time in the UK

3. Sufficient Ties Test

If you don’t meet the above automatic criteria, this test looks at:

Family in the UK
Available accommodation
Time spent working in the UK
90-day rule (frequent prior presence)
Country tie (if you spent more time in the UK than any other country)

The more ties you have, the fewer days you can spend in the UK without becoming tax resident.

Capital gains tax, inheritance tax, and other uk tax considerations

Tax on worldwide income: if you're a UK citizen, you must declare and pay tax on all global income and gains - even if you live in Dubai or another tax-free jurisdiction.

Non-Resident Status: as a non-resident, you're generally only taxed on UK-source income (e.g., rental income, dividends from UK companies).

Impact on Capital Gains: disposals made while non-resident may not be taxed (except UK property), but gains made within 5 years of leaving the UK may be retrospectively taxed if you return.

Inheritance Tax & Domicile: the SRT doesn’t affect your domicile, but it does influence how HMRC views your long-term intent - which can affect IHT exposure.

Expat tax planning – reducing tax liabilities legally

The benefits of international tax planning for high-net-worth expats

1. Optimised tax efficiency

2. Asset protection

3. Diversified wealth management

4. Tax-efficient capital gains, succession and estate planning

5. Compliance with global tax regulations

Tax-efficient investment strategies for expats in Dubai

1. Use offshore investment platforms

2. Avoid unnecessary home country tax traps

3. Follow a globally diversified, evidence-based investment strategy

4. Plan ahead for repatriation or global moves

5. Undertake thorough estate and succession planning

6. Avoid common mistakes and pitfalls

Read more

1. What is evidence-based investing?

Avoiding tax pitfalls and penalties for global income earners

Know your UK tax residency: use the Statutory Residence Test to avoid unintentionally becoming UK tax resident.
Declare worldwide income if resident: report all foreign income and gains to HMRC
Use the remittance basis carefully (for non-doms): understand the trade-offs, costs, and rules for remitting foreign income to the UK.
Pay UK Capital Gains Tax on global assets: report foreign property and share disposals if UK-resident; use tax credit relief when applicable.
Watch foreign pensions and funds: non-UK pensions and offshore funds may be taxed harshly or treated differently - get proper advice.
Disclose foreign trusts and companies: HMRC closely monitors offshore structures - register and report them properly.
File tax returns on time: submit your Self Assessment by the deadline to avoid penalties, even if no tax is due.
Report all offshore accounts: HMRC receives international account data - non-disclosure risks heavy penalties.
Claim double tax relief correctly: use tax treaties and credit relief to avoid being taxed twice on the same income.
Work with an adviser: UK tax law is complex - professional guidance prevents costly mistakes.

Read more

1. Wealth management in Dubai

2. Do I really neeed a financial adviser in Dubai?

International tax compliance

In a global environment of heightened scrutiny and increasing penalties, making sure you comply with tax rules has never been more important - or challenging.

Cross-border tax involves complicated rules, and a considerable amount of time and stress.

Having access to specialist tax advisers, who will ease the burden of meeting your obligations and turn things around quickly and efficiently, can give you considerable peace of mind.

Cross-border taxation

With international tax rules subject to constant change, it’s essential that you regularly review yours and your family’s tax affairs, and plan accordingly.

For many expatriates, international tax planning affects all facets of their financial affairs. You may be worried about the impact that rises in property values are having on inheritance tax, how best to dispose of a share in a business, or the most efficient way to pass on your estate.

Whatever your needs, being able to structure your personal tax affairs effectively can save you time, money and effort.

International trusts

International succession planning, tax and trust laws are complex and sensitive areas. They require specialist expertise and considerable care.

Offshore trusts offer many benefits for expatriates:

Protecting personal wealth from gains and income taxes;
Protecting business assets;
Creating an international tax plan for cross-border interests;
Reducing or removing an estate's inheritance tax liability.

Do you need a trust?

You may want to place assets in trust for estate and succession planning reasons.
You may be looking to reduce your overall tax liability.
Perhaps you're unsure of the wealth of opportunity you have as an expat.

We help create international trust structures for clients, as well as internationally compliant taxation reduction and mitigation strategies, on a daily basis.

Property tax issues

As an international property owner, developer or investor it’s crucial you get the best advice on the tax implications of buying, owning and selling property, as well as relating to ever-changing tax legislation.

For example, if you’re a landlord with buy-to-let property in the UK, how will you be affected by changes such as the phasing in of a reduction in income tax relief on finance costs?

Other issues you may need help with include the appropriate structure for commercial and residential property ownership and disposal, and how that impacts capital gains tax, stamp duty land tax, annual tax on enveloped dwellings and any potential sale.

International tax planning FAQs

What is income tax, how does it apply in the UK and how are British expats affected by it?

Income tax is levied on earned income. However, the tax is not paid on all forms of income - for instance the main types of relief and exemptions are:

Interest on savings
Some state benefits
Income from a trust
National Lottery wins or other gambling income.
Income from tax advantaged accounts such as Individual Savings Accounts (ISAs) and National Savings Certificates.

There are different bands for the rate of income tax in the UK as follows:

Income amount	Tax rate
Up to £11,500	0%
From £11,501 to £45,000	20%
From £45,001 to £150,000	40%
Over £150,000	45%

Each individual usually has a tax-free personal allowance each year which in the 2016/2017 tax year is £11,500.

For every two pounds of income above £100,000 an individual loses one pound of their personal allowance.

Therefore, at £123,000 of income an individual will have lost their entire personal allowance, and will pay tax on income immediately.

If you leave the UK in a tax year to work abroad then you will typically have what is known as a split tax year.

Income tax will be payable until the date that you leave the UK, and would not be payable on earnings accrued outside of the UK after the date of leaving - hence the term ‘split tax year’ referring to two tax periods, one on which tax is payable and one on which tax is not payable.

What is capital gains tax and how does it apply to UK assets?

Capital gains tax is a tax that is applied to assets owned by an individual which they liquidate, typically this is applied to investments and property when sold.

Each individual usually has a capital gains exemption each year, which in the 2016/2017 tax year is £11,300.

Standard rates – 10% basic rate tax payer, 20% higher rate tax payer

Residential property sales – 18% basic rate, 28% higher rate tax payer.

What is inheritance tax and how does it apply to Britons and UK residents?

Inheritance tax is applied to the estate of all UK domiciled individuals upon their death.

Your country of domicile is usually the place that your father considered his home at the time of birth.

Unlike your country of residence which is altered when you move abroad, your country of domicile is very difficult to change, it is dependent upon you severing all ties with your old home nation and living outside of that nation for a long time.

Inheritance tax is levied at a rate of 40% on anything above what’s called a nil rate band. The current nil rate band (NRB) is £325,000 per individual.

Gifts to your spouse are not taxable and your NRB can be passed to your spouse along with your assets. Therefore, if your spouse dies after you they will have a NRB of £325,000 x 2 or £650,000 if your assets are passed in whole to your spouse.

Gifts to charity are tax free and a reduced IHT rate of 36% applies to your estate where more than 10% of your net estate is left to charity.

There is IHT relief on other gifts made as long as you survive 7 years after making them. Otherwise inheritance tax is payable on gifts on a sliding scale.

Years before death gift was made	Percentage of IHT payable
0-3 years	100%
3-4 years	80%
4-5 years	60%
5-6 years	40%
6-7 years	20%

What is a trust?

A trust is an obligation binding a trustee (which can be an individual or a company) to take care of assets for the benefit of one or more other individuals known as beneficiaries.

The individuals who run the trust usually make decisions about how the assets in the trust are to be managed and dispersed - they are known as trustees.

Trustees carry out the wishes of the person who has set up the trust and contributed the assets into the trust. This person is known as the settlor.

A settlor typically makes their intentions known for the trust in a legal document called a trust deed or in their will.

What are the main forms of trusts?

A bare trust

A bare trust - otherwise known as an absolute trust - is one where the beneficiary, the person who benefits from the trust, has an immediate and absolute right to both the trust capital and the income received by the trust from that capital.

Someone who sets up a bare trust is certain of the beneficiaries they intend, because, once the trust has been set up, the beneficiaries cannot be changed.

The trust assets are legally held in the name of a trustee or trustees, but the trustees cannot change how the income or capital is passed on to the beneficiary or beneficiaries.

Bare trusts are commonly used to transfer assets to minors. Trustees hold the assets on trust until the beneficiary is 18 in England and Wales. At this point, beneficiaries can demand that the trustees transfer the trust fund to them.

Interest in possession trust

An interest in possession trust is one where one beneficiary of a trust has an immediate and automatic right to the income from the trust as it arises.

The trustee must pass all of the income received, less any trustees’ expenses, to this beneficiary.

The beneficiary who is entitled to the income of the trust for life is known as a life tenant. A beneficiary who is entitled to the trust capital is known as the remainderman.

They typically receive the capital from the trust upon the death of the life tenant.

What is a discretionary trust?

In a discretionary trust, the trustees are the legal owners of any assets held in the trust. They are responsible for managing the trust for the benefit of the beneficiaries.

The trustees have discretion as how to use the income received by the trust. They may also have discretion about how to distribute the trust’s capital.

Trustees may decide:

When assets are paid out;
To whom payments are made;
How often these payments are made;
Conditions to impose on the recipients.

Would a trust benefit me?

A trust can help an individual in various ways, the main uses are as follows:

As part of effective inheritance tax plan
To avoid the complications of estate administration on death
To prevent wills and probate disputes
To protect your intended beneficiaries from inheriting too early, coercion or losing assets on divorce or bankruptcy

What sort of trust should I use?

This is a difficult question to answer as it is one that depends entirely on your circumstances, as well as your goals and objectives.

By working with a fee-based financial planner you can be sure that your circumstances are considered, and an efficient approach is used.

Interestingly, through combining different forms of trusts an individual can create a portfolio which will provide significant protection against inheritance tax on their estate, but also provide a fixed income and / or the ability to recall some or all of the capital from the trust.

By blending the different types of trusts above, as well as various other trusts that may be available to you - such as a discounted gift trust and / or a loan trust, we can help ensure that your portfolio is managed effectively over time.

This will not only support your own requirements, but also ensure you're passing on your wealth in an efficient manner.

What is international tax planning, and why is it important for expats in Dubai?

International tax planning helps expats legally reduce tax liabilities across jurisdictions. For Dubai-based expats, it’s essential to manage obligations in their home country, especially since the UAE has no personal income tax but foreign reporting may still apply.

How does international tax structuring help expatriates manage global assets?

Proper structuring ensures that assets - like property, businesses, or investments - are held in a tax-efficient way, reducing exposure to capital gains, inheritance, or income taxes in various jurisdictions.

What are the biggest tax mistakes expats in Dubai make?

Common mistakes include assuming they’re exempt from all taxes, failing to break tax residency in their home country, neglecting to report foreign income, or ignoring estate planning.

Can an international tax adviser help me legally reduce my tax burden?

Yes. Advisers use double tax treaties, residency rules, and strategic asset placement to minimise global tax exposure while ensuring full legal compliance.

How does double taxation work for expats living in Dubai?

Though the UAE doesn’t tax personal income, your home country may tax your global income. Double taxation agreements (DTAs) help prevent being taxed twice on the same income.

What tax considerations should expats be aware of before moving to Dubai?

You should assess your home country’s exit rules, tax residency status, potential exposure to capital gains or inheritance tax, and whether foreign income remains taxable back home.

Do I need to declare my foreign income while living in Dubai?

Possibly. While Dubai won’t tax you, your home country might. For example, UK and U.S. citizens may still need to declare global income even if they reside abroad.

Are there tax benefits for high-net-worth expats in Dubai?

Yes. The UAE offers a tax-free environment, and with proper planning, HNWIs can also reduce estate, dividend, and capital gains tax exposure in other jurisdictions.

How can I set up an offshore company for tax efficiency while living in Dubai?

An international tax adviser can help you establish a compliant structure through free zones or offshore jurisdictions, ensuring proper substance and transparency under global tax laws.

Do UK expats in Dubai need to file a tax return in the UK?

Only if you have UK-source income (e.g., rental, dividends, pensions), or if HMRC requires it. Non-residents still need to file under certain circumstances.

What is the UK statutory residence test, and how does it impact tax obligations?

This test determines if you're a UK tax resident based on days spent in the UK and your ties to it. If you're deemed UK resident, you're taxed on your worldwide income.

How does living in Dubai affect my UK capital gains tax liability?

Non-residents are generally exempt from UK CGT - except on UK property or if they become UK resident again within 5 years of disposal.

Can UK expats avoid inheritance tax while living in Dubai?

Living abroad doesn’t automatically exempt you from UK inheritance tax if you remain UK domiciled. You may need to consider domicile planning and trusts to reduce IHT exposure.

Are UK pension contributions taxable for expats in Dubai?

UK tax relief on contributions is only available to UK tax residents. However, existing pensions may grow tax-free, and withdrawals should be planned to avoid unnecessary tax.

Do UK expats need to pay national insurance while living abroad?

You're not required to pay UK National Insurance, but you can make voluntary contributions to maintain your State Pension eligibility.

How does rental income from UK property affect my tax status as an expat?

UK rental income is taxable in the UK, even for non-residents. You may need to register under the Non-Resident Landlord Scheme and file annual tax returns.

Can I use a UK ISA or SIPP while living in Dubai?

You can't contribute to an ISA once non-resident, but existing ISAs can remain tax-free. SIPPs can still be managed and accessed, but withdrawals may be taxable depending on your residency status.

What tax reliefs are available for UK expats working in Dubai?

You may benefit from the Foreign Earnings Exemption, non-residency tax treatment, and pension contribution planning, but reliefs depend on your residency and income source.

How do I handle tax if I move back to the UK after living in Dubai?

Plan ahead. Timing asset disposals, pension withdrawals, or business sales before returning can reduce UK tax exposure. You'll become UK tax resident again - so prepare for full reporting.

International tax planning Expert tax advice for Dubai expats

Helping you turn challenges into opportunities