HMRC Weighs Exceptional Circumstances Relief for Expats Who Left the Gulf — The Statutory Residence Trap That Could Catch UAE Non-Residents Off Guard

The escalation of the Iran conflict in late February 2026, following US-Israeli strikes on 28 February, prompted a wave of British nationals based in Dubai, Abu Dhabi, and across the wider Gulf to return to the UK — some on short notice, many with uncertain timelines for returning. That movement has created an acute and under-reported tax issue: under the UK Statutory Residence Test (SRT), days spent in the UK count towards determining tax residency, and any individual who crosses the relevant threshold risks being treated as UK tax resident for the entire tax year. HMRC is now being asked whether it will extend the SRT's 'exceptional circumstances' provision to cover the current situation — a question with significant financial consequences for the cohort of HNW British nationals who have structured their affairs around UAE non-residency.

The Mechanics: What the 60-Day Rule Does and Does Not Cover

The SRT includes a specific carve-out for days spent in the UK as a result of exceptional circumstances beyond the individual's control. A maximum of 60 days per tax year can be excluded from the day count under this rule, provided the individual had an intention to leave as soon as circumstances permitted. The legislation cites examples including national emergencies, war, civil unrest, natural disasters, and sudden life-threatening medical situations. However, the rule has been interpreted narrowly by HMRC and the courts — most recently in a tribunal decision that reinforced the requirement that the individual must be prevented from leaving the UK, not merely making a safety-conscious choice to remain. For HNW individuals with UAE non-resident status, the 60-day ceiling is itself material: many will already have UK days in reserve, and 60 additional unplanned days could push certain individuals across automatic residence thresholds.

• 60-day maximum: the ceiling on exceptional circumstances days that can be excluded from the SRT day count in any tax year
• Automatic UK residence triggers at 183 UK days in a tax year, or under the sufficient ties test at lower thresholds depending on connections to the UK
• UAE tax residency requirement: 183 days within any consecutive 12-month period spent in the UAE
• UK income tax on worldwide income for UK residents: up to 45% on earnings above £125,140
• Foreign Income and Gains (FIG) regime: 4-year full exemption on foreign income and gains for those non-resident for 10 or more consecutive tax years prior to returning
• Temporary Repatriation Facility (TRF): pre-April 2025 foreign income and gains can be remitted to the UK at a flat 12% rate during 2025/26 and 2026/27

Why the Exceptional Circumstances Argument Is Weaker Than It Appears

The precedent most commonly cited is HMRC's position during the Ukraine conflict, when it confirmed that days spent in the UK by individuals returning for their safety could qualify as exceptional — on the basis that the FCDO had issued advice against all travel to affected regions. The current Middle East situation is materially different. As of mid-March 2026, the FCDO advises against all but essential travel to the UAE, rather than issuing a blanket 'avoid all travel' directive. That distinction is not trivial under the SRT framework, because the test requires that the individual be unable to leave the UK, not that travel is inadvisable. Aviation networks have also adapted: routes through Turkey, Central Asia, and alternative Gulf hubs such as Muscat and Riyadh have continued to operate. HMRC is likely to apply the standard it used in COVID-19 disputes — where stranded individuals could claim the relief, but those who chose to remain for precautionary reasons generally could not. Tax specialists at Withers have noted that the situation can become 'more complicated for people who divide their time between the UAE and the UK,' with dual residency risk arising in more than one jurisdiction simultaneously.

The Structural Risk: Temporary Non-Residence and the Five-Year Trap

For HNW individuals who left the UK fewer than five complete tax years ago, the stakes are higher than the current tax year alone. The temporary non-residence rules provide that certain income and capital gains accumulated while abroad — including close company distributions and certain asset disposals — can be brought back into the UK tax charge upon return if the non-residence period was less than five full tax years. This means that an individual who relocated to Dubai in 2022 or 2023, and who is now in the UK due to the conflict, may need to weigh not only the current-year SRT position but the potential triggering of a historical liability. Split-year treatment — which divides a tax year into an overseas and a UK-resident portion — can mitigate exposure in some scenarios, but only where strict qualifying conditions are met and planning has been undertaken proactively.

What Affected HNW Individuals Should Consider Now

The most immediate priority for UAE-based non-residents who have returned to the UK is to document their position precisely: the date of return, the steps taken to leave the UK and any barriers encountered, and any FCDO or airline communications that support a claim for exceptional circumstances. Those with sufficient flexibility should consider whether a third-country stay — in Portugal, Switzerland, Malta, or elsewhere — could interrupt UK day accumulation without requiring a return to the Gulf. Individuals who have been non-UK resident for ten or more consecutive years and who are returning permanently face a different calculus: the FIG regime provides a four-year full exemption on foreign income and gains from the date of UK return, making an orderly repatriation under the TRF potentially advantageous rather than ruinous. The architecture of the UK's reformed tax residency framework rewards those who plan; it penalises those who treat non-residency as a passive status rather than an actively managed position.

Advisory Perspective

We are working with a number of UAE-based clients who have returned to the UK in recent weeks, some unexpectedly. The central question in each case is the same: does the current situation prevent departure, or does it merely discourage it? The answer determines whether those days are disregarded under the SRT or counted against residency. Our view is that HMRC will apply its standard exceptional circumstances framework with limited flexibility — the COVID and Ukraine precedents involved a level of FCDO advisory and travel restriction that does not yet exist for the UAE specifically. Clients who are concerned about accumulating UK days should seek a formal assessment of their SRT position immediately, review whether a third-country stay is viable, and begin gathering contemporaneous evidence now rather than retrospectively. For those considering permanent relocation to the UK, the FIG regime and TRF together create a window of planning opportunity that, properly structured, materially reduces the tax cost of that transition.