The United Kingdom’s recent 2024 labour government budget introduced significant tax reforms aimed at addressing fiscal challenges. These changes bring increased financial burdens for businesses, investors, and high-net-worth individuals. Meanwhile, the United Arab Emirates (UAE) continues to attract global attention with its tax-friendly policies.
We suspect many UK business owners and individuals are looking for a way to mitigate these new challenges and costs. So this article is designed to outline the differences, exploring the UK’s new tax landscape, and how it compares to the UAE’s established system, highlighting why relocation to the UAE could be advantageous.
The budget raises employers’ NICs by 1.2 percentage points to 15%, with the threshold lowered from £9,100 to £5,000. This change is projected to generate £25 billion annually but will increase costs by approximately £800 per employee for many companies.
From April 2027, pensions will be included in assets subject to inheritance tax. Additionally, agricultural property relief is capped, with the first £1 million exempt and subsequent amounts taxed at half the standard rate. These changes necessitate updated estate planning strategies for high-net-worth families.
The Capital Gains Tax rate on carried interest increases to 32% starting in April 2025, with further changes expected. This will likely impact investment strategies, particularly for private equity professionals.
The government has introduced a new vaping tax and raised Air Passenger Duty by up to £2 for short-haul economy flights. Private jet flights face a 50% increase, reflecting a targeted approach to luxury and environmentally impactful sectors.
With the rise in employers’ NICs, businesses are facing higher operational expenses, which may lead to restricted hiring and consumer price hikes.
The inclusion of pensions in inheritance tax calculations complicates succession planning for high-net-worth individuals, potentially requiring more complex trust arrangements.
Higher Capital Gains Tax rates may influence decisions to divest or hold onto assets, impacting overall portfolio strategies.
Since June 2023, the UAE levies a federal corporate tax at a competitive 9% on taxable income exceeding AED 375,000, among the lowest rates globally.
Unlike the UK, the UAE does not impose personal income tax on salaries or wages, allowing individuals to retain more of their earnings.
The UAE’s tax framework does not include capital gains tax, inheritance tax, or wealth tax. A 5% VAT applies to most goods and services, which remains minimal compared to other nations.
The absence of personal income tax significantly boosts disposable income for salaried professionals and entrepreneurs alike.
UAE free zones offer tax exemptions, streamlined regulatory processes, and strategic benefits for companies, enhancing profitability and operational efficiency.
The UAE’s lack of inheritance and capital gains taxes facilitates seamless wealth accumulation and transfer, making it a preferred destination for high-net-worth families.
Relocating requires understanding UAE residency laws and business compliance requirements to ensure smooth transitions.
While the UAE offers tax benefits, living expenses, particularly in cities like Dubai and Abu Dhabi, may offset some advantages for expatriates.
Consulting with financial and legal advisors is essential to navigate regulatory landscapes and maximize benefits.
Several businesses and individuals have successfully relocated to the UAE, leveraging its tax regime to grow their wealth and thrive in a global business hub. All of the entities we have assisted in their relocation have adapted to local regulations and maximized opportunities without any issues. Just look at our reviews for feedback from businesses and individuals who have made the move and are reaping the benefits.
The UK’s 2024 tax reforms present challenges for businesses and high-net-worth individuals, with increased costs and reduced exemptions. In contrast, the UAE’s tax-friendly policies offer an attractive alternative for those seeking financial growth and operational efficiencies. Consulting with experts can help navigate these changes and determine the best course of action.
