In a significant development arising from the Spring Budget 2024, the UK has announced the abolition of the favorable tax regime for non-doms, with effect from 6 April 2025. This pivotal change marks a watershed moment, prompting a necessary revaluation of tax strategies for those affected. 

Among the potential solutions to the abolition of the remittance basis regime is relocation to a new jurisdiction, with the UAE/Dubai being a particularly attractive option. 

1. The end of an Era: Changes for UK Resident Non-Domiciled Individuals

The abolition of the non-domiciled tax status will fundamentally alter the tax landscape for many residents in the UK. This change means that individuals previously benefiting from this status will need to prepare for a potentially significant increase in their tax liabilities, as their worldwide income and gains will become subject to UK taxation. 

2. Action points: Analysis and Potential Relocation

For UK resident non-domiciled individuals, this calls for a meticulous review of their tax positions to understand the full impact of these changes. It is an opportune moment to consider whether restructuring one's personal or business financial arrangements could mitigate these new challenges. This may involve considering the timing of income distributions and of realisation of gains to maximize the benefits of the current non-doms regime or take advantage of transitional provisions and the set-up of trust structures. On the other hand, for some, relocation to a more tax-favorable jurisdiction may emerge as a viable strategy to preserve wealth and optimise tax efficiency.

3. Spotlight on the UAE: A Favourable Alternative

Among the jurisdictions gaining attention as attractive alternatives, the United Arab Emirates (UAE) stands out for its undeniable tax advantages. The UAE offers a compelling proposition for individuals and businesses alike considering relocation in response to the UK's changing tax regime.

4. Benefits of Moving to the UAE

Ease of Visa Acquisition: particularly beneficial for non-EU passport holders, the UAE offers relatively straightforward paths to residency visas, facilitating a smoother transition for individuals and their families. 

Attractive Tax Regime: the UAE is renowned for its advantageous tax policies, including:

- No Tax on Investment Income: a key draw for individuals and investors seeking to maximise their returns without the burden of taxation

- No Employment Income Tax: an appealing aspect for those relocating their family offices or businesses, ensuring that employment income remains untaxed. 

- Low Corporate Tax Rate: with a corporate tax rate of just 9%, the UAE offers a competitive edge for businesses looking to optimise their tax liabilities.

- Favorable Participation Exemption System: this system offers additional tax benefits, reinforcing the UAE's position as a tax-efficient jurisdiction.

- Access to an Extensive Double Tax Treaty Network: the UAE currently has a network of 137 Double Taxation Agreements further enhances its attractiveness, facilitating more efficient cross-border business operations and investment activities. 

- Tax Resident Certificate for Natural Persons and Companies: the ability to obtain a Tax Resident Certificate is a crucial advantage for those looking to apply double tax treaties effectively. This certificate serves as formal proof of tax residency in the UAE, enabling individuals and businesses to potentially reduce their tax liabilities through the application of double tax agreements between the UAE and other countries.

In conclusion, the upcoming changes to the UK's tax regime for non-domiciled residents necessitate proactive planning and consideration of all available options. The UAE, with its numerous fiscal advantages, emerges as a highly compelling jurisdiction for those contemplating relocation in light of these changes.

As the landscape of international taxation evolves, making informed decisions becomes crucial for preserving your financial well-being. 

In this regard, Statura stands ready to assist individuals and businesses considering the UAE as their new home. 

With our expertise in cross-border taxation in UK and UAE and comprehensive relocation services we are uniquely positioned to guide you through every step of this pivotal transition. 

Whether you are evaluating the UAE as a potential jurisdiction for tax efficiency, business relocation, or personal residency, Statura is here to ensure a seamless and beneficial move.