City workers in the Business Bay financial district in Dubai, United Arab Emirates, on Wednesday, March 4, 2026.
Wala Alsher Bloomberg | getty images
The UK government is trying to turn geopolitical turmoil into an opportunity, encouraging thousands of Britons to reconsider life in Dubai, as war in the region threatens the city’s reputation as an exotic paradise.
There are approximately 240,000 British citizens living in the UAE. Over the years, they have been attracted by zero income tax, security, international schools and a glamorous lifestyle. Now, with missiles intercepted and air travel repeatedly disrupted over Gulf capitals, the long-held stability of Dubai expat life is being called into question.
Last week, UK Finance Minister Rachel Reeves touted the country’s “competitive tax system” in a conversation with CNBC’s Sarah Eisen at her “Invest in America” forum.
Reeves listed tax and investment incentives, including encouraging companies to list in London, where they would not have to pay stamp duty on shares for the first three years.
“We have the lowest corporation tax rate in the G7,” he said, citing tax and investment incentives such as encouraging companies to list in London, where they don’t have to pay stamp duty on shares for the first three years.
Reeves hopes to introduce Britain as a “safe harbor economy” for wealthy immigrants, and has said that the Treasury will revisit tax rules, reuters The report cited an unnamed official. The UK Treasury did not respond to CNBC’s request for comment.
Is Britain taking advantage of this opportunity?
Early indications suggest the war has already triggered movement among British citizens living in the UAE, although not necessarily back to the UK.
Nearly one in eight Britons living in the UAE, or about 30,000 people, have left since fighting began on February 28, according to figures cited by the Financial Times. CNBC contacted the British Embassy and Dubai Media Office, which could not confirm the numbers.
While many of the departures may be precautionary rather than permanent, the figures point to a crackdown on continued migration from Britain to the Gulf.
Some families have returned to Europe temporarily and are turning to wealth centers such as Switzerland or low-cost destinations such as Spain and Portugal to avoid the conflict. Whether Britain benefits from that rearmament may depend on how long the war lasts and whether Britain’s economic offer actually improves.
Dubai’s safe haven status
Those pulling out of the UAE include families worried about safety, professionals facing frequent flight suspensions and entrepreneurs reevaluating long-term plans in a region that suddenly feels unstable.
An Emirates Boeing 777 aircraft prepares for landing as a plume of smoke rises from the ongoing fire near Dubai International Airport in Dubai on March 16, 2026.
– | AFP | getty images
The pressure on families with children has increased. Schools across the emirate were closed for weeks after the war began, shifting students to remote learning, prompting some parents whom CNBC has spoken with since the war began to send children back to their home countries to complete the academic term in schools teaching in-person.
Dubai’s appeal was never purely financial. It tried to attract Westerners with the promise that they could enjoy the opportunities of the Middle East without the instability of the Middle East.
The stakes are high for the UK.
Nearly 6,000 high-growth British business owners moved abroad between January 2024 and January 2026, according to a February report. Analysis By Rathbones, citing filings in the Official Register of UK Companies. The United Arab Emirates was the most popular destination, followed by Spain and the United States.
According to the analysis, the exodus was largely concentrated in London and the South East and dominated by the tech sector, where one in ten founders moved abroad.
UK tax vs Dubai tax
The tax remains the central fault line.
While the UAE imposes no personal income tax or capital gains tax, the UK has tightened its long-standing “non-dom” regime for taxpayers whose permanent tax home is outside the country. It abolished the remittance basis from April 2025 and replaced it with a residence-based system, which taxes most long-term residents on their worldwide income and gains.
Under the new rules, recent arrivals to the UK who have spent at least 10 consecutive years abroad are eligible for a limited four-year exemption on foreign income and gains. After that, global income is fully taxable, a sharp break from the previous system that allowed money to remain offshore indefinitely.
The UK has increased employer National Insurance contributions from 13.8% to 15%, cutting the taxable income threshold.
The government has also cut investor relief, reducing the lifetime allowance on capital gains qualifying for preferential treatment from £10 million to £1 million, or about $1.35 million, weakening the incentive for founders to back early-stage companies.
“I doubt the Rachel Reeves review will be enough to drive wealthy expatriates back from the UAE,” said Stallone Shaikh, founder of Alliance Street Consultancy, which helps entrepreneurs set up businesses in the UAE.
“For ultra‑high‑net‑worth individuals, these changes simply don’t move the needle,” Shaikh told CNBC. “Britain is penalizing people for earning money rather than encouraging them.”
Personal income tax in the UK is now above 45% on earnings over £125,140. Capital gains tax can reach up to 24%, while the UAE offers a corporate tax of 0% on profits up to $100,000 and 9% above that.
What keeps expats in Dubai?
Mahesh Patel, a 60-year-old British national who moved to Dubai in 2023, helps UK clients set up businesses in the UAE through Melrose Consultancy. While some of his contacts have discussed exit plans, Patel told CNBC that he has no intention of returning.
“I’m staying put,” he said. “If anything, I might look at Bangkok, Phuket or Bali – where the cost of living is a fraction of Dubai or the UK.”
Patel said lifestyle, schools and global connectivity remain a bigger support than taxes alone.
Some observers expect a large-scale repatriation of Britons from Dubai. The UAE remains attractive, and those who have moved there may return when the conflict subsides.
Henley & Partners, which helps the wealthy relocate to other countries, previously told CNBC that Dubai remains resilient, but clients are keeping Options opened amid uncertainty.
“Situations like this reinforce a core principle we often discuss with clients: the value of global optionality,” said Dominic Volek, the company’s group head of private clients.
Volek noted that “internationally mobile families” typically have options in the US, Europe, the Middle East, and Asia, adding: “These decisions are typically strategic and long-term in nature, rather than reactions to short-term events.”
