UK-to-Dubai Relocation Glossary | Route Business Hub

Freezone

A UAE economic zone offering 100% foreign company ownership and — for companies meeting the Qualifying Free Zone Person conditions — access to a 0% UAE Corporate Tax rate on qualifying income. Freezone companies are built for operating within the zone and internationally; trading directly with UAE mainland customers generally needs a distributor, branch or additional registration.

Mainland

A UAE company licensed by an emirate's Department of Economy, able to trade anywhere in the UAE without restriction, including with government entities. Since the 2021 Commercial Companies Law changes, mainland companies are 100% foreign-owned in most sectors. Pays the standard 9% UAE Corporate Tax above AED 375,000, without the freezone route to 0%.

Qualifying Free Zone Person (QFZP)

The UAE Corporate Tax status a freezone company must hold — and keep holding — to access the 0% rate on Qualifying Income: adequate UAE substance, income within the qualifying categories, non-qualifying revenue under the de-minimis threshold, audited accounts, and no election into the standard regime. Losing QFZP status can mean losing the preferential rate for the whole period in question, not just on the disqualifying income.

Statutory Residence Test (SRT)

HMRC's test for whether an individual is UK tax resident in a given tax year, worked out through automatic overseas tests, automatic UK tests, and — if neither settles it — the sufficient ties test. Where your company is registered has no bearing on your own SRT position; it's assessed entirely separately.

Split-year treatment

A set of specific cases that divide a UK tax year into a UK part and an overseas part for someone who moves abroad or to the UK mid-year, rather than treating the whole year as UK-resident by default. The most common case for relocating directors requires starting full-time work overseas and meeting tight limits on UK days and workdays for the rest of the year.

Temporary non-residence (the five-year rule)

HMRC rules that tax specified income and gains realised while genuinely non-UK-resident if you were UK resident in at least 4 of the 7 tax years before leaving and return to the UK within 5 years — as if you'd never left, in the tax year you return. Catches gains on assets owned before departure (including selling a company) and certain close-company dividends.

Holding company

A company that sits above one or more operating companies, owning their shares rather than trading itself. A UAE holding company can consolidate ownership, dividends and a future exit in a 0% personal tax jurisdiction — commonly used by directors with multiple companies or planning a future sale.

Emirates ID

The mandatory UAE national identity card issued as part of the residency visa process, requiring biometrics and a medical fitness test — the one step in a UAE company setup that can't be completed entirely remotely from the UK.

Central management and control

The UK case-law test for company tax residence: a company is UK tax resident if it's centrally managed and controlled from the UK, regardless of where it's incorporated. A UAE-incorporated company run in practice from the UK — board decisions genuinely taken by people genuinely there — remains UK tax resident.

IR35 / off-payroll working

Rules testing whether someone providing services through their own limited company would, if that company were removed from the arrangement, look like a direct employee of the end client — based on control, substitution, and mutuality of obligation. Status is assessed per engagement, not as a single label for the whole company.

Business Asset Disposal Relief (BADR)

A reduced Capital Gains Tax rate (18% for disposals from 6 April 2026, up from 10% before recent staged increases) on up to £1 million of lifetime qualifying gains when selling a trading company — conditional on a minimum 5% shareholding, officer/employee status, and trading-company status, each held for at least 24 months before sale.

Director's loan account

The running record of money owed between a director and their company that isn't salary, dividend, or expense reimbursement. An overdrawn balance not repaid within 9 months and 1 day of the company's year-end triggers Section 455 tax (currently 35.75% of the outstanding amount) — refundable once repaid, but not for a long time afterwards.

Making Tax Digital (MTD)

HMRC's requirement to keep digital records with an unbroken digital link to filed returns, rather than manually retyping figures between disconnected systems. Live for VAT since 2019; extends to Income Tax Self Assessment from 6 April 2026 for sole traders and landlords with combined qualifying income over £50,000.

Marginal relief (Corporation Tax)

The taper that smooths UK Corporation Tax between the 19% small profits rate (profits up to £50,000) and the 25% main rate (profits above £250,000), so the transition isn't a sudden cliff-edge. Has to be calculated and claimed on the return itself — it isn't automatic — and the effective marginal rate on profit inside the band works out higher than the 25% headline rate, at roughly 26.5%.

Qualifying Income (UAE Corporate Tax)

The category of income a UAE freezone company must earn — broadly, transactions with other free zone persons or specified activities with parties outside the free zone — to access the 0% Corporate Tax rate as a Qualifying Free Zone Person. Income outside these categories is taxed at the standard rate, and too much non-qualifying revenue can disqualify the company from the 0% rate entirely.