French Tech Entrepreneur's Dubai Migration: Navigating the New UK Tax Landscape

A Case Study Analysis with Expert Commentary

Recorded at Home House, London - June 2025

The recent overhaul of UK tax rules for non-domiciled residents has prompted a significant wave of relocations, particularly among high-net-worth individuals and entrepreneurs. A recent expert discussion featuring Alasdair Wilson, Partner in the Private Capital team at Harbottle & Lewis, and Daniel Dronsfield, Client Services Director at EER Middle East, examined the practical and legal considerations facing those contemplating such moves through the lens of a detailed case study.

The Case: Pierre and Sarah's Dilemma

The scenario involves Pierre (54) and Sarah (50), a French technology entrepreneur and his wife who have been UK residents for 13 years. Pierre has built a successful technology company registered in Ireland, with dividends flowing to a Geneva bank account invested in a €10 million portfolio of US and European securities. The couple owns a £7 million London family home generating £150,000 annual rental income, plus a €3 million Provence villa earning €50,000 annually through luxury holiday rentals. Their adult children (ages 25 and 23) will remain UK residents.

The Tax Transformation: What's Changed

Wilson outlined the dramatic shift in the UK's approach to taxing non-domiciled residents following the Finance Act 2025. "There's a big change for them," Wilson explained. "Whereas before, Pierre would have benefited from the remittance basis as a UK resident with only 13 years under his belt, going forward, he doesn't have that ability."

Key Changes Include:

Income and Capital Gains: Pierre's worldwide income and gains would now be subject to UK tax without relief, including dividends from his Irish company, investment portfolio profits, and French villa rental income.

Inheritance Tax Revolution: Perhaps most significantly, Pierre's worldwide estate will now fall within the scope of inheritance tax. As Wilson noted, "It is the change to IHT that's getting a lot of press as being a primary motivator for people looking at making these kind of radical moves."

The New 'Long-Term Resident' Concept: After 10 years of UK residence, individuals achieve 'long-term resident' status, creating a tax tail that lasts for at least three years after leaving the UK, potentially extending up to 10 years depending on additional years of residence.

Residence Rules: The 89-Day Challenge

The statutory residence test, introduced in 2013, provides a formulaic approach to determining tax residence. Wilson described it as "beautifully formulaic in that you put some data in and you get an answer out."

For Pierre and Sarah, the first year would be particularly restrictive, limiting them to 89 days in the UK to maintain non-resident status. "It's quite restrictive in the first year," Wilson noted. "It's a little bit sticky, the residence. It's harder to break out of the orbit of the UK than it is to remain in it."

The sufficient ties test examines factors including:

• Available accommodation in the UK

• Working more than 40 days in the UK

• Family connections (UK-resident partners or children)

• Where most time is spent globally

  
  

Dubai: The Destination of Choice

Dronsfield explained why Dubai has become increasingly attractive, particularly for tech entrepreneurs. "This is quite common at the moment, and a lot of people are looking to come to Dubai, especially in the tech sector. There's a real drive on that at the moment."

Entry Routes and Business Setup

The UAE offers several pathways for entrepreneurs:

Corporate Route: Setting up a business provides the foundation for residency visas, with the company able to sponsor both Pierre and Sarah, plus any future employees.

Golden Visa Program: A 10-year visa option requiring a 2 million dirham investment (approximately £440,000) through either fixed deposits or property purchase.

Free Zone Selection: Dronsfield emphasized the importance of choosing the right jurisdiction within the UAE's complex structure of free zones, each with specific advantages depending on business activities and trading patterns.

Practical Considerations and Challenges

Estate Planning Complexities

Wilson stressed the importance of updating wills when changing jurisdiction. "Whilst domicile is no longer relevant for most tax purposes, it's still relevant for succession purposes." The French property would be subject to EU Succession Regulation, while Swiss assets follow similar rules, potentially creating complications with habitual residence changes.

Work Patterns and Pitfalls

For entrepreneurs like Pierre, managing work activities during UK visits becomes crucial. "He doesn't want to take any management decisions on UK soil," Wilson warned, highlighting the risk of bringing the Irish company within UK corporation tax scope through central management and control.

Family Dynamics

With adult children remaining in the UK, the 89-day limitation poses real challenges for family relationships. Wilson acknowledged this difficulty: "Sarah would want to plan quite carefully if she is coming back to the UK, because in that first year, she probably needs to limit herself to 89 days."

The UAE Tax Reality

Contrary to popular perception, the UAE does impose taxes. Dronsfield explained: "There is a 9% corporate tax regime, and there's 5% VAT. On a global scale, it's still a very low tax jurisdiction." The corporate tax, introduced recently as part of the UAE's move toward greater transparency, hasn't deterred clients. "I've not had any clients turned off by the fact that there's a 9% tax."

Support Services and Integration

EER's comprehensive approach covers company formation, immigration, and relocation services. Dronsfield described their role: "We're specialists in setting up companies, getting visas issued, and relocating people, but we work with the client's wider advisory team."

Services include:

• Orientation tours and area selection

• Property search and lease registration

• Utility connections and licensing

• Professional networking facilitation

  
  

Community and Lifestyle

Dubai's expatriate community (89% of the population) provides a multicultural environment. Dronsfield noted the vibrant French community and emphasized safety as a key driver: "The UAE is an extremely safe country, especially for people with younger families. That seems to be one of the key drivers with people moving at the moment."

Strategic Advice for Prospective Movers

Wilson's primary recommendation focuses on motivation and practicality: "The number one thing is why are you leaving? What's the driver? A lot of people talk about tax in that context, but I think really, it's all about lifestyle and family."

Key Planning Points:

1. Assess practical workability: Can the family function with restricted UK visit days?

2. Review fund flows: Understand liquidity requirements and ongoing tax exposures

3. Examine treaty implications: Ensure tax treaty benefits remain available

4. Update legal structures: Review wills, trusts, and estate planning arrangements

   
   

The Broader Trend

Both experts confirmed the continuing momentum of UK departures. Dronsfield observed: "Obviously in the lead-up to April, it was pretty busy... but I think now we're in the sort of second phase." The trend extends beyond ultra-high-net-worth individuals to middle-class families feeling the impact of the new tax regime.

Conclusion

The case of Pierre and Sarah illustrates the complex interplay of tax, legal, and practical considerations facing UK residents contemplating international relocation. While the UAE offers attractive alternatives, successful migration requires careful planning, expert guidance, and realistic assessment of family and business needs.

As Wilson concluded: "These are the kind of things you need to get under the bonnet for, to make sure that the accounting in due course doesn't throw up any surprises."

The discussion underscores that while tax considerations may initiate the conversation about relocation, the ultimate decision must encompass lifestyle, family dynamics, and long-term strategic objectives. For those considering such moves, early professional guidance and thorough planning remain essential to navigate the increasingly complex international tax landscape.

This analysis is based on a discussion recorded at Home House, London, in June 2025, featuring Alasdair Wilson (Harbottle & Lewis) and Daniel Dronsfield (EER Middle East). The information provided is for educational purposes and should not be considered specific legal or tax advice.