A main attraction for Doctors relocating to work in the United Arab Emirates is that there is no income tax. Your take-home pay is exactly the same as your salary!
At Allocation Assist, some doctors relocating from the UK have asked if their income will be taxable in their home country. The short answer is no, but read on for more precise details.
Do I have to pay UK tax on income earned in Dubai?
If you are resident and working in the UAE for at least one full tax year, and meet the requirements for non-resident status in the UK, you will not be taxed on any income earned outside the UK. Non-residents (or expats) are only liable for tax on income earned in the UK.
Non-residence status is assessed on a tax-year basis (6th April to the following 5 April) and should apply if you are working full-time in the UAE and do not stay in the UK for more than 90 days or work in the UK for more than 30 days within the tax year. However, if you relocate for less than a full tax year, you will remain a UK resident for tax purposes and be liable to pay UK tax on foreign income.
How can I make sure that I have non-resident status?
You must inform HMRC when you are leaving the UK to live abroad. If you usually complete a self-assessment tax return, you will need to report your residency status to HMRC on your tax return. If you do not usually complete a self-assessment tax return, you need to fill in form P85 online:
https://www.gov.uk/guidance/get-your-income-tax-right-if-youre-leaving-the-uk-p85 If you are unsure about your UK residence status, you can check this website: https://www.gov.uk/tax-foreign-income/residence
Will I have to pay tax if I transfer money back to the UK?
While you have non-resident tax status, all your earnings outside the UK are legitimately tax-free. You are not liable to pay UK tax on these earnings when you transfer them to a UK account. This is determined by your residence status when the income was earned, not when it is transferred.
Do I have to pay other taxes in the UK?
As a non-resident, you may be liable for Capital Gains Tax (CGT) if you sell UK property or land at a profit, or on rental income for a property that you own in the UK. As a non-resident, you are not liable for Capital Gains Tax on other assets or property outside the UK, unless you relocate back and become a UK resident within the same tax year. https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-uk-residential-property It is possible to apply to get your rental income paid without deduction of UK tax by registering as a non-resident landlord: https://www.gov.uk/government/publications/non-resident-landlord-application-to-have-uk-re ntal-income-without-deduction-of-uk-tax-individuals-nrl1
Do I have to pay National Insurance?
As a non-resident, you do not have to pay National Insurance (NI) contributions on income earned outside the UK. However, a significant amount of time spent working abroad could affect your entitlement to the UK state pension and other benefits, should you return to the UK. It is possible to make voluntary NI contributions to make up for any gaps, if this is a concern.
You can check your National Insurance record on the UK government website: https://www.gov.uk/check-national-insurance-record
What happens if I return to live in the UK?
It is important to seek professional tax advice when you are considering returning to the UK. If possible, start to make plans for your international relocation at least 18 months before returning to the UK, as your tax-liability changes as soon as you lose your non-resident status. You may need to get tax advice on a “split-year” in which you relocate and spend time in both countries during a particular tax year. If you have been an expat for less than five years, temporary non-residence rules may apply, meaning that you may have to pay tax on gains realised during your absence. This should not be the case if you have been non-resident for five years or more.
For more information on returning to the UK, see this website: https://www.gov.uk/tax-return-uk
There are opportunities within the dynamic and growing UAE healthcare sector for western-trained doctors with the right qualifications, skills and experience. Contact Allocation Assist today: https://www.allocationassist.com
References: https://nichols.co.uk/news/moving-to-dubai-uk-tax-implications/ https://holbornassets.com/blog/expats/a-guide-to-moving-from-the-uk-to-the-uae/#:~:text=Tax%20and%20financial%20tips%20for,100%25%20of%20their%20monthly%20salar
Is it possible to retire in Dubai?
Yes, as long as you have enough savings. In 2020, the Dubai Government introduced a new retirement visa. To apply for the retirement visa, you must be at least 55 years old and have either a monthly income of AED 15,000 or more, savings of at least 1 million AED, own an unmortgage property valued at least 2 million AED, or at least 2 million in assets split between savings and property. You also need a health insurance policy that meets the requirements for the UAE retirement visa.
Dubai is now a place where expats can build a long-term home
Dubai is considered a safe and attractive destination for expats, especially given the chance to earn a tax-free salary. New visa and residence schemes also encourage doctors and other healthcare professionals to make Dubai their home for the longer term. By saving wisely and investing in property, it is even possible to retire in Dubai.
