Question: We plan to leave Dubai next year to move back to Scotland. We own an apartment and were thinking about selling it but now, I think we will keep it and rent it out. My question is if we will have to pay any tax in the UK if we make any money from it.
We thought we’d just leave the money in a bank account in the UAE and use it when we visit. Do we have to tell anyone in the UK about it? JT, Dubai
Answer: Tax issues are complex so I can only provide a brief overview here. Personal advice should always be obtained.
Someone who is UK resident for tax purposes is subject to UK income tax on their worldwide income. That means that any rental income from a property in the UAE will be taxable in the UK, no matter where it is paid. It does not have to be sent to the UK to be subject to UK tax.
If someone has income in addition to that from employment, it must legally be disclosed to HMRC, His Majesty’s Revenue and Customs, by way of a self-assessment tax return.
Failure to disclose income, from any source, is tax evasion, which is a crime and subject to substantial penalties.
The amount of rental profit can be reduced by offsetting certain expenses such as agency and management fees and some maintenance and repairs. Proper records must be kept as evidence may be requested.
In addition, JT should be aware that if the property is sold when he is resident in the UK, any profit will be subject to capital gains tax. A few expenses can be deducted and there is a small annual exemption of £3,000 ($3,845) per person. Above this, the rates of tax for capital gains are 18 per cent for basic rate taxpayers and 24 per cent for higher rate taxpayers, which also applies if the capital gain pushes a person into a higher rate tax band.
There are numerous tax considerations if anyone is leaving the UAE, or the wider GCC, to move to the UK, so expert advice should always be sought.
Q: I have a full-time job but I have been working on my hobby and doing a bit of paid work on the side. My boss knows about this and my hobby has no connection to the company, so there is no issue with competition.
My question is whether my bank is likely to cause a problem if I receive payments that are not through the WPS (Wages Protection System) from my employer? LB, Dubai
A: There is no reason why the bank should have a problem with the additional payments but banks will sometimes ask about the source of funds for compliance reasons.
The UAE Central Bank has procedures in relation to anti-money-laundering regulations but any questions should be simply to confirm the legality of the payments and the source. Ad hoc small payments are unlikely to raise suspicion but if questioned, it will be as part of standard checks and LB should simply answer honestly.
To run any kind of business in the UAE, a suitable trade licence is required. As LB already has a Dubai visa, and is simply selling a service or consulting, the easiest and cheapest option will be a DED (Department of Economic Development) e-trader licence. This has an annual fee of Dh1,070 ($290).
An application can be made online via https://dedcafe.ae/service/e-trader-license/or in person at the DED cafe in Palm Strip Mall, Jumeirah Beach Road, Jumeirah 1.
Provided the total gross income is less than Dh375,000 a year, LB does not need to register for VAT or complete quarterly returns.
Q: Is there a minimum salary in the UAE? I heard that’s the case but can’t find any information. I worked in Qatar before and there was a minimum salary there, but now I am looking to apply for a job in the UAE. CK, The Philippines
A: While there has been discussion about introducing a minimum salary in the UAE, labour law does not stipulate an amount. The UAE government expectation is “that salaries must cover basic needs of the employees”.
In 2013, the Ministry of Human Resources and Emiratisation set out guidelines for different types of workers.
These are: Dh12,000 ($3,270) for university graduates, Dh7,000 for skilled technicians and a minimum wage of Dh5,000 for skilled labourers with a secondary school certificate. These sums are not enforced but companies are expected to follow the guidelines.
There are also agreements between a few foreign governments and the UAE. For example, the Filipino and UAE governments have set the minimum monthly salary for overseas foreign workers at $400.
Qatar has a minimum wage that, for 2024, is set at 1,000 rials ($274.72) per month plus a housing allowance of 500 rials and 300 rials for food.
Keren Bobker is an independent financial adviser and senior partner with Holborn Assets in Dubai, with more than 30 years’ experience. Contact her at keren@holbornassets.comor at www.financialuae.com
The advice provided in our columns does not constitute legal advice and is provided for information only
Match info
Uefa Champions League Group B
Barcelona v Tottenham Hotspur, midnight
The President's Cake
Director: Hasan Hadi
Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem
Rating: 4/5
Women%E2%80%99s%20T20%20World%20Cup%20Qualifier
%3Cp%3EFrom%20September%2018-25%2C%20Abu%20Dhabi%0D.%20The%20two%20finalists%20advance%20to%20the%20main%20event%20in%20South%20Africa%20in%20February%202023%0D%3Cbr%3E%20%0D%3Cbr%3EGroup%20A%3A%20United%20States%2C%20Ireland%2C%20Scotland%2C%20Bangladesh%0D%3Cbr%3EGroup%20B%3A%20UAE%2C%20Thailand%2C%20Zimbabwe%2C%20Papua%20New%20Guinea%0D%3Cbr%3E%20%0D%3Cbr%3EUAE%20group%20fixtures%3A%0D%3Cbr%3ESept%2018%2C%203pm%2C%20Zayed%20Cricket%20Stadium%20%E2%80%93%20UAE%20v%20Thailand%0D%3Cbr%3ESept%2019%2C%203pm%2C%20Tolerance%20Oval%20-%20PNG%20v%20UAE%0D%3Cbr%3ESept%2021%2C%207pm%2C%20Tolerance%20Oval%20%E2%80%93%20UAE%20v%20Zimbabwe%0D%3Cbr%3E%20%0D%3Cbr%3EUAE%20squad%3A%20Chaya%20Mughal%20(captain)%2C%20Esha%20Oza%2C%20Kavisha%20Kumari%2C%20Rinitha%20Rajith%2C%20Rithika%20Rajith%2C%20Khushi%20Sharma%2C%20Theertha%20Satish%2C%20Lavanya%20Keny%2C%20Priyanjali%20Jain%2C%20Suraksha%20Kotte%2C%20Natasha%20Cherriath%2C%20Indhuja%20Nandakumar%2C%20Vaishnave%20Mahesh%2C%20Siya%20Gokhale%2C%20Samaira%20Dharnidharka%0D%3C%2Fp%3E%0A
Killing of Qassem Suleimani
Veil (Object Lessons)
Rafia Zakaria
Bloomsbury Academic
The cost of Covid testing around the world
Egypt
Dh514 for citizens; Dh865 for tourists
Information can be found through VFS Global.
Jordan
Dh212
Centres include the Speciality Hospital, which now offers drive-through testing.
Cambodia
Dh478
Travel tests are managed by the Ministry of Health and National Institute of Public Health.
Zanzibar
AED 295
Zanzibar Public Health Emergency Operations Centre, located within the Lumumba Secondary School compound.
Abu Dhabi
Dh85
Abu Dhabi’s Seha has test centres throughout the UAE.
UK
From Dh400
Heathrow Airport now offers drive through and clinic-based testing, starting from Dh400 and up to Dh500 for the PCR test.
What is blockchain?
Blockchain is a form of distributed ledger technology, a digital system in which data is recorded across multiple places at the same time. Unlike traditional databases, DLTs have no central administrator or centralised data storage. They are transparent because the data is visible and, because they are automatically replicated and impossible to be tampered with, they are secure.
The main difference between blockchain and other forms of DLT is the way data is stored as ‘blocks’ – new transactions are added to the existing ‘chain’ of past transactions, hence the name ‘blockchain’. It is impossible to delete or modify information on the chain due to the replication of blocks across various locations.
Blockchain is mostly associated with cryptocurrency Bitcoin. Due to the inability to tamper with transactions, advocates say this makes the currency more secure and safer than traditional systems. It is maintained by a network of people referred to as ‘miners’, who receive rewards for solving complex mathematical equations that enable transactions to go through.
However, one of the major problems that has come to light has been the presence of illicit material buried in the Bitcoin blockchain, linking it to the dark web.
Other blockchain platforms can offer things like smart contracts, which are automatically implemented when specific conditions from all interested parties are reached, cutting the time involved and the risk of mistakes. Another use could be storing medical records, as patients can be confident their information cannot be changed. The technology can also be used in supply chains, voting and has the potential to used for storing property records.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
UAE currency: the story behind the money in your pockets
