Brits fled to Dubai for low taxes — now war is making some rethink the deal

The U.K. government is trying to turn geopolitical upheaval into an opportunity, encouraging thousands of Britons to reconsider life in Dubai, as war in the region threatens the city’s reputation as an attractive haven.

Around 240,000 British nationals live in the UAE. For years, they have been drawn by zero income tax, security, international schools, and a glamorous lifestyle. Now, with missiles intercepted over Gulf capitals and air travel repeatedly disrupted, the long-standing stability of Dubai expat life is being questioned.

Last week, Rachel Reeves, the U.K. finance minister, touted the country’s “competitive tax system” in a conversation with CNBC’s Sara Eisen at its “Invest in America” forum.

“We have the lowest rate of corporation tax in the G7,” she said, mentioning tax and investment incentives, encouraging firms to list in London, where they won’t have to pay stamp duty on shares for the first three years.

Reeves hopes to pitch Britain as a “safe harbour economy” for wealthy expats, and has said that the Treasury will revisit tax rules, Reuters reported, citing an anonymous official. The U.K. Treasury did not respond to a CNBC request for comment on this.

Is the U.K. seizing the moment?

Early signs suggest the war has already triggered movement among British citizens living in the UAE, though not necessarily back to the U.K.

According to data cited by the Financial Times, roughly one in eight Britons living in the UAE, about 30,000 people, have left since fighting broke out on Feb. 28. CNBC reached out to the British Embassy and the Dubai Media Office, which could not confirm the numbers.

While many departures could be precautionary rather than permanent, the figures point to a rupture in what had been a steady migration from Britain to the Gulf.

Some families have returned temporarily to Europe, gravitating toward wealth hubs like Switzerland or sunnier, lower‑cost destinations such as Spain and Portugal to wait out the conflict. Whether Britain benefits from that reassessment may depend on how long the war lasts and whether the U.K.’s economic offer has genuinely improved.

Dubai’s safe-haven status

Those exiting the UAE include families worried about security, professionals facing repeated flight suspensions, and entrepreneurs reassessing long‑term plans in a region that suddenly feels volatile.

Pressure has mounted for households with children. Schools across the Emirates were shuttered for weeks after the war began, shifting students to remote learning, prompting some parents, who CNBC has spoken with since the war began, to send children back to their home countries to complete the academic term at schools teaching in-person.

Dubai’s appeal was never solely financial. It sought to attract Westerners with the promise they could enjoy Middle East opportunities without Middle East instability.

The stakes for the U.K. are high.

Nearly 6,000 high‑growth British business owners relocated abroad between January 2024 and January 2026, according to a February analysis by Rathbones, citing filings in the U.K.’s official register of companies. The UAE was the single most popular destination, followed by Spain and the United States.

The exodus was heavily concentrated in London and the South East and dominated by the tech sector, where one in ten founders relocated overseas, per the analysis.