Jurisdiction(s):
United Kingdom

UK tax exposure for Gulf returnees: statutory residence test, limited 60-day ‘exceptional circumstances’ relief, and CGT clawback under temporary non-residence rules

Published on: 02 April 2026

Published by a Law360 reporter

Legal News

Article summary

People returning to the UK from Dubai may face a capital gains tax bill on assets sold while outside the UK, according to tax advisers

The UK operates a strict statutory residency test that permits overseas tax residents to spend no more than 183 days in the UK before they are treated as UK tax residents for the whole fiscal year. If they become UK tax resident, their worldwide income and capital gains fall within the scope of UK taxation. A further 60 days is available only in 'exceptional circumstances'.

Large numbers of UK citizens are heading back to the UK to avoid the fallout of the Iran war. In March 2026 alone, more than 122,000 British citizens flew back to Britain, including over 75,000 arriving from the UAE, according to the Foreign Office. The Foreign Office also notes that upwards of 5,700 British citizens returned to the UK on 31 flights, of which 3,300 people were on 17 flights from Dubai...

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