Tax is usually the first question UK landlords ask about Abu Dhabi, and the answer is often misunderstood. This article explains the basics and the questions worth asking. It is not tax advice: everyone's position is different, and you should take advice from a UK tax adviser.
The UAE position
The UAE has no personal income tax, and no capital gains tax for individuals. If property is held through a company, UAE corporate tax may apply.
The UK position
UK tax residents remain liable to UK tax on overseas rental income and gains. So moving money from a UK flat to an Abu Dhabi apartment does not, on its own, take that income out of UK tax. What changes is the property, the market and the costs, which is why the comparison needs to be done properly, with your own figures.
Selling a UK property first
If you are thinking of selling a UK buy-to-let to fund a purchase abroad, that is a tax decision in its own right. Speak to a UK tax adviser about capital gains tax before you decide anything.
Questions to take to your adviser
- How would rental income from an Abu Dhabi property be taxed in my situation, and how is it reported?
- If I sell a UK property, what capital gains tax would I pay, and does the timing of the sale matter?
- Should I buy in my own name, jointly or through a company, and what are the UK and UAE consequences of each?
- How would the property be treated for inheritance tax?
- Does my tax residence status change anything, now or in the future?
How we help
We don't give tax advice. We handle the Abu Dhabi side – finding, checking, buying and managing the property – and where our clients need UK tax, mortgage or financial advice, we refer them to firms we work with.