QROPS Dubai. Reduce Your Tax Bill with a UK Pension Transfer
British expats living in the Dubai or wishing to retire in Dubai can now transfer their pension into a QROPS Dubai to maximize pension tax relief. British expats living or working in Dubai can take advantage of their offshore status and transfer their UK pension offshore to somewhere secure like the New Zealand or Malta and will no longer have to pay UK taxes on their pension as long as you stay offshore. A QROPS Dubai will help you avoid all UK taxes on your pension as well as any taxes in Dubai.
Residents of Dubai who have worked at a British company and accrued a UK pension can also transfer their pensions offshore to avoid UK taxes.
Why live in the Dubai (UAE) as a British expat?
Over 60,000 Brits live and work in Dubai. There are all types of careers you can pick up in Dubai such as nursing jobs, oil & gas jobs, engineering jobs, teaching jobs, nanny jobs, security jobs, call centre jobs, accounting jobs, financial jobs, aviation jobs and telecommunications jobs in Dubai. Dubai is becoming a more and more popular destination for UK expats to come and work. Wages are high and it is a developed country not too far from the UK. Furthermore, there is no income tax for expats living or working in Dubai.
Brand new facilities with all types of accommodation and restaurants, warm weather, little rain, sandy beaches, career choices, zero personal income tax rate and a short flight to the UK make Dubai a great choice for a working environment or as a retirement place for British expats. A QROPS Dubai is a great vehicle to hold your pension to avoid UK taxes, whilst ensuring security. No need to pay any more UK taxes on your pension to the Inland Revenue.
Can I drink alcohol legally in Dubai?
Despite what you read in the media, you can get alcohol at most restaurants, bars and clubs attached to hotels in Dubai. It is illegal to sell to Muslims and if you want to drink at home you need a special licence, which you can acquire in Dubai. Public affection is also frowned against in Dubai.
Today, Dubai City has emerged as a global city and a business hub. Although Dubai’s economy was built on the oil industry, the emirate’s model of business drives its economy, with the effect that its main revenues are now from tourism, real estate, and financial services, similar to that of Western countries.
Dubai has recently attracted world attention through many innovative large construction projects and sports events. This increased attention has highlighted labour rights and human rights issues concerning its largely South Asian workforce. Dubai’s property market experienced a major deterioration in 2008 and 2009 as a result of the worldwide economic downturn following the Financial crisis of 2007–2010. The currency in Dubai is the Dirham (approx 5.75 to the Pound in September 2011).
As of 2005, 17% of the population of the emirate was made up of UAE nationals. Approximately 85% of the expatriate population (and 71% of the emirate’s total population) was Asian, chiefly Indian (51%), Pakistani (16%), Bangladeshi (9%) and Filipino (3%) and a sizeable community of Somalis numbering around 30,000. A quarter of the population however reportedly traces their origins to Iran. In addition, 16% of the population (288,000 people) living in collective labour accommodation were thought to be primarily Asian.
The median age in the emirate was about 27 years. Although Arabic is the official language, English is the lingua franca of the city and is very widely spoken by the majority of its residents either as a primary or secondary language. Other languages spoken by Dubai’s many foreign residents include Hindi, Urdu, Bengali, Tamil, Tagalog, Farsi, Chinese, and Malayalam.
Dubai has been called the “shopping capital of the Middle East”. Dubai alone has more than 70 shopping malls, including the world’s 7th largest shopping mall, Dubai Mall. The city draws large numbers of shopping tourists from countries within the region and from as far as Eastern Europe, Africa and the Indian Subcontinent. While boutiques, some electronics shops, department stores and supermarkets operate on a fixed-price basis, most other outlets consider friendly negotiation a way of life.
Dubai is covered with skyscrapers, none of which eclipse the Burj Khalifa (Khalifa Tower), now by far the world’s tallest building at 828 m (2,717 ft). The Burj Khalifa’s design is derived from the patterning systems embodied in Islamic architecture, with the triple-lobed footprint of the building based on an abstracted version of the desert flower hymenocallis which is native to the Dubai region. Other architectural feats include the world’s first 7* hotel, the Burj Al Arab, which resembles an Arab vessel (see picture above).
For the Brits living in Dubai, you can take advantage of your offshore address to reduce UK tax on your pension as well as protect your wife and children from high UK taxation should anything happen to you by transferring your UK pension to a QROPS Dubai.
Benefits of a QROPS Dubai
What are the benefits of a QROPS Dubai Pension Transfer for British expats in Dubai?
• Avoid UK income tax
• Avoid UK dividends tax
• Avoid UK capital gains tax (CGT)
• Avoid UK inheritance tax (IHT)
• Currency choice. You can choose to have your pension transferred to a QROPS denominated in USD, EUR or keep it in GBP
• Have the ability to make higher returns with freedom of investment
• Family Protection: Upon death, the entire pension pot gets passed on to your nearest and dearest
• Security: The pension is held in a secure jurisdiction such as New Zealand or Malta
What is a QROPS Dubai?
A Qualifying Recognized Overseas Pension Scheme (QROPS Dubai) allows your UK pension to be transferred offshore to reduce your tax burden. Effectively, you will no longer pay UK tax on your pension whilst you are offshore and after 10 years of living offshore, the reporting requirements to HMRC cease.
If you are living in Dubai at the moment, you can take advantage of your offshore address in order to move your UK pension into a QROPS Dubai to avoid further UK taxes down the line. A QROPS Dubai is the perfect vehicle to avoid UK taxes if you are considering living or retiring abroad.
What is the economy like in Dubai?
Dubai’s gross domestic product as of 2008 was US$ 82.11 billion. Although Dubai’s economy was built on the back of the oil industry, revenues from oil and natural gas currently account for less than 6% of the emirate’s revenues. It is estimated that Dubai produces 50,000 to 70,000 barrels (11,000 m3) of oil a day and substantial quantities of gas from offshore fields. The emirate’s share in UAE’s gas revenues is about 2%. Dubai’s oil reserves have diminished significantly and are expected to be exhausted in 20 years. Real estate and construction (22.6%), trade (16%), entrepôt (15%) and financial services are the largest contributors to Dubai’s economy. Dubai’s top exporting destinations include India (US$ 5.8 billion), Switzerland (US$ 2.37 billion) and Saudi Arabia (US$ 0.57 billion). Dubai’s top re-exporting destinations include India (US$ 6.53 billion), Iran (US$ 5.8 billion) and Iraq (US$ 2.8 billion). The emirate’s top import sources are India (US$ 12.55 billion), China (US$ 11.52 billion) and the United States (US$ 7.57 billion). As of 2009 India was Dubai’s largest trade partner.
The government’s decision to diversify from a trade-based, oil-reliant economy to one that is service and tourism-oriented made property more valuable, resulting in the property appreciation from 2004–2006. A longer-term assessment of Dubai’s property market, however, showed depreciation; some properties lost as much as 64% of their value from 2001 to November 2008.
Dubai’s property market experienced a major downturn in 2008 and 2009 as a result of the slowing economic climate. Mohammed al-Abbar, Chief Executive Officer of Emaar told the international press in December 2008 that Emaar had credits of $70 billion and the state of Dubai additional $10 billion while holding estimated $350 billion in real estate assets. By early 2009, the situation had worsened with the global economic crisis taking a heavy toll on property values, construction and employment. As of February 2009 Dubai’s foreign debt was estimated at approximately $80 billion, although this is a tiny fraction of the sovereign debt worldwide.
A City Mayors survey rated Dubai as 44th among the world’s best financial cities in 2007, while another report by City Mayors indicated that Dubai was the world’s 33rd richest city in 2009, in terms of purchasing power parity (PPP). Dubai is also an international financial centre and has been ranked 37th within the top 50 global financial cities as surveyed by the Mastercard Worldwide Centres of Commerce Index (2007) and 1st within the Middle East.
What are the taxes for British expats like in Dubai?
Corporation tax is only 20% and foreigners living in Dubai pay no personal income tax, so a pension transfer to a QROPS Dubai would mean no taxes in the UK or Dubai on your pension. It would be paid out gross either into a Dubai account or an offshore account in the Isle of Man for example.
If you are a British expat living offshore in Dubai, you can take advantage of your offshore address to transfer into a QROPS Dubai. A QROPS Dubai will help maximize pension tax relief and protect your family should something happen to you.
QROPS Providers in Dubai
Do I need to move my pension to Dubai?
No. Currently, there are no QROPS providers in Dubai. However, Your pension can be transferred to a secure jurisdiction such as Malta or New Zealand where it will be out of the UK tax system and your pension will be paid gross and grow tax free. In fact, Brooklands Superannuation scheme based in New Zealand also has an office in Dubai even though the QROPS is not based there, so could be a good match for British expats in Dubai.
Do I need to live and retire in Dubai?
No, you can live anywhere offshore. As long as you are outside the UK, your QROPS will grow free of UK tax. If you ever return to live permanently in the UK, your pension will simply return to UK Self Invested Pension Plan (SIPP) rules.
Click here for more information on a QROPS United Arab Emirates
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Pension tax relief for UK expats, QROPS Dubai article written by QROPS Specialists.