Hoxton Wealth’s Claire Spinks explains why UK expats fleeing escalating tensions in the Middle East for the safety of home may be facing an unexpected and costly consequence: stepping back onto British soil could trigger UK tax residence, and potentially a substantial tax bills.
The warning from Spinks comes as record numbers of wealthy Britons have relocated to Dubai in recent years, with an estimated 16,500 millionaires leaving the UK in 2025 alone, with the UAE one of the primary destinations.
As instability disrupts life in the UAE, many British nationals are discovering that the UK’s Statutory Residence Test is far less forgiving than they anticipated. Claire Spinks, Global Head of Tax at Hoxton Wealth, warns that even a stay of a few weeks could be enough to classify an individual as UK resident for the 2025/26 or 2026/27 tax year.
For high-earning Dubai expats accustomed to zero income tax, the impact can be dramatic.
“People move to Dubai expecting a low-tax environment,” Spinks said. “But if they accidentally trigger UK residence, their worldwide income can suddenly fall back into the UK tax net.”
A Dubai-based executive earning £400,000 a year could face a UK tax bill of more than £160,000 if they inadvertently trigger UK tax residence.
There is a common misconception that the 60-day “exceptional circumstances” rule offers protection. While HMRC may disregard days spent in the UK due to emergencies, the threshold for what qualifies as exceptional is extremely high.
“HMRC’s interpretation of exceptional circumstances is often far narrower than people expect,” Spinks explains. “While countries such as Iran and Iraq are currently subject to strict ‘no travel’ advisories, the UAE is presently classified under ‘all but essential travel’. Because the Foreign Office is not formally advising evacuation, HMRC is likely to count days spent in the UK towards the Statutory Residence Test, regardless of wider regional instability.”
With HMRC able to identify an individual’s presence in the UK through passport and border entry data, returning expats may unknowingly accumulate UK days that affect their residence status. Those returning without considering the impact on their Statutory Residence Test, both in terms of day counts and other connecting factors, could find themselves inadvertently falling back into the UK tax net.
The issue is particularly relevant given the significant migration of wealth to the region. With thousands of high-net-worth individuals relocating to Dubai in recent years, many expatriates may be particularly sensitive to any change in their UK residence position.
What began as a physical evacuation following the outbreak of hostilities on 28 February has, for some, evolved into a potential financial shock. Those who returned to the UK believing they were protected by “exceptional circumstances” may find the rules offer far less protection than anticipated.
“The real risk isn’t necessarily today,” Spinks said. “It’s 9 to 18 months down the line when tax returns are filed, and claims for exceptional circumstances are reviewed. After COVID, we saw a significant increase in HMRC enquiries around these claims. Many individuals assumed they were safe until HMRC began questioning their UK day counts and the wider factors affecting their residence position.”
Where exceptional circumstances are not accepted, individuals may be forced to rely on complex treaty claims. If those are unsuccessful, they could face UK taxation on employment income, investment income and other worldwide earnings.
Spinks warns that decisions made in the coming weeks could have tax consequences lasting years.
“The Statutory Residence Test does not pause during periods of geopolitical tension,” she said. “For expats earning in low-tax jurisdictions, returning to the UK, even temporarily, can have dramatic tax consequences.”
She is urging individuals to review their residence position carefully before travelling and seek professional advice.
“Where leaving the region becomes necessary, expats should not assume the UK is the only option. In many cases, relocating temporarily to another country rather than returning to Britain could prevent accidentally triggering UK tax residence.”
