Why are UK residents choosing Dubai as their new home post-election? The recent changes in UK policies are expected to trigger significant migration, especially among high-net-worth individuals (HNWIs) and skilled professionals.
This blog explores the factors driving this exodus and why Dubai is becoming their preferred destination.
What has changed in the UK post-election? The new government’s stringent policies on immigration and tax reforms have created uncertainty, prompting many to seek stability elsewhere.
Non-doms (non-domiciled individuals) are UK residents but are not UK nationals in the UK.
They may have foreign nationality or domicile but live in the UK and are subject to UK-specific tax rules.
The non-dom status allows them to be taxed differently on their foreign income and gains.
Starting from 6 April 2025, the UK will abolish the non-dom tax status.
It will be replaced by the new foreign income and gains (FIG) regime, allowing non-doms to not pay UK income tax and capital gains tax on their foreign income and gains for up to four tax years.
After four years, all foreign income and gains will be taxed in the UK, regardless of whether they are brought into the country.
This shift is part of a broader modernization effort to end preferential tax treatments that incentivize keeping income offshore.
Thus, this change affects many with significant foreign income, prompting them to consider relocating to more tax-friendly environments like Dubai.
According to Henley Private Wealth Management on millionaire migration trends, the UK is projected to see an exodus of 9,500 millionaires—more than double the number that left in 2023.
Recap & Key Points:
New immigration policies have tightened controls on non-UK residents, affecting:
Data:
The composition of net migration has changed drastically since the Brexit referendum. Shortly before the 2016 referendum, EU citizens made up a majority of all net migration to the UK.
However, this began to fall post-referendum, even though the UK remained part of the EU until 2020.
Net Migration of EU and Non-EU Citizens in the UK:
This shift is largely due to the post-Brexit immigration system, which is more restrictive towards EU citizens and more liberal towards non-EU citizens.
In 2022, non-EU net migration reached 892,000, driven primarily by migrant workers and international students.
The United Arab Emirates has been identified as the leading destination for attracting millionaires in 2024, according to a report by Henley Private Wealth Management on millionaire migration trends.
The country’s zero income tax rate, luxurious lifestyle, and golden visa program are expected to attract 6,700 new millionaires this year alone.
Although the influx of Russians moving to the UAE has recently slowed, this has been partly balanced by a growing number of European and British immigrants.
Dubai offers numerous benefits that make it an attractive destination for those leaving the UK:
Recent reports indicate a significant demographic shift in Dubai’s real estate market.
While interest from Russian buyers has cooled, other international investors, including those from the UK, have stepped in.
Dubai’s real estate market is known for its high returns and resilience. Key benefits include:
According to Dominic Volek, Group Head of Private Clients at Henley & Partners, “An unprecedented 128,000 millionaires are expected to relocate worldwide this year, surpassing the previous record of 120,000 set in 2023.”
These areas are known for their luxury properties and high-end amenities, attracting many British investors.
Investing in Dubai real estate can also secure long-term residency through programs like the Golden Visa.
This has become a major draw for retirees and professionals seeking stability and a high quality of life. Read more on UAE Property Golden Visa – How It Works
Ending note:
The recent political and economic changes in the UK are expected to lead many residents to look for better opportunities abroad.
Dubai, with its favorable tax environment, robust infrastructure, and high standard of living, stands out as an attractive destination.
Whether it’s for investment or long-term residency, Dubai offers compelling reasons for UK residents to consider making the move.
For detailed insights on the UK’s non-dom tax changes and their impacts, refer to the BBC News article published on April 9, 2024. For migration data, see the Migration Observatory article published on June 13, 2024.