UK Rental Income: What Happens When You Move to Dubai?

One of the attractions of moving overseas can be to reduce your UK tax exposure, and it is true that becoming “non-resident” for tax purposes can mean that less of your income is exposed to UK tax. However, there are special rules that apply for rental income

One of the attractions of moving overseas can be to reduce your UK tax exposure, and it is true that becoming “non-resident” for tax purposes can mean that less of your income is exposed to UK tax. However, there are special rules that apply for rental income – unfortunately moving abroad does not mean that you stop paying UK tax on UK property income.

The UK’s law states that income from UK property is always taxable in the UK, regardless of your location or residence status. In fact, most income from UK sources may remain UK taxable. We then check the Double Tax Treaty to see if that overrides this local law.

Article 6 of the UK-UAE Double Tax Treaty tells us that where a UAE resident is entitled to income from UK property, this is allowed to be taxed in the UK. So there is no “Treaty Relief” against UK tax for this income.

In fact, with no action taken, once you have been abroad for six months HMRC will expect your tenant or estate agent to withhold tax from the rent they pay to you and pay this over quarterly. This means you will only receive 80% of the income, with 20% paid to HMRC.

Non-Resident Landlord Scheme

Alternatively, you can register with HMRC’s “Non-Resident Landlord Scheme” and continue to receive the rent gross. This involves filing form NRL1 (an online form these days – https://www.gov.uk/guidance/apply-as-an-individual-to-receive-uk-rental-income-without-uk-tax-deducted) and you would receive confirmation that your tenant or agent can pay you gross.

You can then report your rental income through your self-assessment tax return and pay over any tax as usual. If you are a UK citizen (or from a qualifying country) you may continue to benefit from your personal allowance, so in the 2025-2026 tax year the first £12,570 of rental income may be tax-free.

(There are two options for tax for non-residents, please see other guidance for full details).

What about a sale of that UK property while you are living in Dubai?

A few years ago, HMRC introduced stand-alone capital gains tax (CGT) returns that were due 60 days after the sale completion date. As a non-resident who sold a UK property you must file one of these whether there is tax to pay or not.

Again, the UK-UAE Double Tax Treaty allows the UK to continue to tax such a sale, even if you are UAE resident.

Suggestions for expats owning UK property:

• Continue to keep records of your rental income and expenses, income remains UK taxable,
• Continue to keep records of any improvements you make to the property,
• Update your address with HMRC and consider filing a form NRL1,
• Consider using a UK estate agent who has experience with the non-resident rules,
• Remember the CGT deadline is very short and CGT still applies.

If you are planning to relocate to Dubai and have UK investment property it is advisable to consider your position before you depart the UK and seek professional advice in advance.

Related content

• MOVING TO DUBAI
• RENTAL INCOME
• NON-RESIDENT LANDLORDS
• ARTICLES