It’s impossible to have missed the headlines over the past 18 months discussing the mass exodus from the UK of wealthy individuals. It is estimated the UK lost a net 16,500 millionaires in 2025 alone. Many long-standing UK residents have chosen to relocate to the Middle East in search of more favourable tax regimes and opportunities. But with the rise in regional conflict, some of those who moved abroad have found themselves unexpectedly returning to the UK.
Naturally, personal safety comes first. However, an unplanned return can bring important UK tax implications, particularly for individuals whose affairs were carefully structured around being non-UK resident.
This article highlights the key tax considerations for returning expats, especially those coming back from the Middle East and sets out practical steps to help you protect your position.
The UK’s Statutory Residence Test (SRT)
UK tax residence is determined under the Statutory Residence Test (SRT), which looks at three key elements:
- The number of days spent in the UK during the tax year (measured by midnights);
- Whether you meet any of the automatic residence or non‑residence tests; and
- Your UK ties, such as family, work, accommodation, and past presence in the UK.
In practice, the SRT works as a tiered system. Some individuals will be automatically non-resident if they spend very few days in the UK, have their only home overseas or work full-time overseas.
Others will be automatically resident if they exceed 182 days in the UK, have their only home here or work full-time in the UK.
For everyone else, residence depends on a combination of day count and UK ties, with the permitted number of days reducing as the number of ties increases.
Many expats therefore plan their UK visits meticulously to stay below their allowed day count. However, an unplanned return, particularly late in the tax year, such as in March, can cause someone to exceed the relevant day counts or trigger additional UK ties.
This could result in becoming UK tax resident for the whole of the 2025/26 tax year, even if arrival occurs just weeks before the tax year end. The consequence is potential exposure to UK income and capital gains tax on worldwide income and gains for the full tax year.
The “exceptional circumstances” rule
The SRT allows up to 60 days per tax year to be disregarded where an individual is in the UK due to “exceptional circumstances” outside their control. The legislation specifically recognises circumstances such as war, political unrest and natural disasters. On the surface, this may suggest that expats returning from conflict‑affected regions in the Middle East could rely on this rule.
However, the test is more restrictive than it appears, and recent case law has clarified the limits of the provision.
To rely on exceptional circumstances, all of the following must be met:
- Exceptional circumstances must exist that prevent you from leaving the UK;
- Those circumstances must be beyond your control; and
- You must intend to leave the UK as soon as those circumstances permit.
While war clearly satisfies the requirement that circumstances are beyond an individual’s control, HMRC, and now the courts, place considerable emphasis on the first and third conditions.
There has been little case law on this topic but one point up for discussion in the courts has been whether a strict reading of the first condition means that the days will only qualify as exceptional if the circumstances prevent you from leaving the UK, not if they compel you to come to the UK.
This distinction is crucial. Being driven to return to the UK because of exceptional circumstances (e.g., evacuation due to conflict) may not qualify.
This could significantly narrow the situations in which returning expats can rely on the 60‑day exemption.
In that more narrowed context, to meet the first condition, you must be prevented from leaving the UK entirely, not simply prevented from returning to the Middle East. If you hold citizenship, residency rights or safe‑harbour alternatives in another country, HMRC may argue that you could reasonably leave the UK, meaning your continued presence is voluntary rather than compelled.
The third condition also means that you must intend to leave the UK at the earliest reasonable opportunity. Any days spent in the UK after you decide, even implicitly, to remain will count in full. If you could relocate to another safe country at short notice, HMRC may contend that staying in the UK is a matter of choice, not a necessity.
Other residence traps to watch for
Even if you meet the conditions for exceptional circumstances, any days spent in the UK during that period may still count for other parts of the Statutory Residence Test.
In particular:
- UK workdays still count, even during exceptional circumstances. A single day of work performed in the UK can impact your residence status.
- Having accessible accommodation in the UK can create a UK tie, bringing you within a more sensitive day-count threshold.
- Visits by family or remote work arrangements can inadvertently increase UK connections, tightening the SRT calculations.
Temporary non‑residence rules — a significant risk
For those who left the UK only recently, the Temporary Non-Residence (TNR) rules may create major tax exposure.
If you meet the conditions for temporary non-residence and you have been non‑resident for five years or fewer, certain income and gains realised while abroad may be pulled back into the UK tax net when you re‑establish UK residence. An unexpected return to UK residence could therefore crystallise a large and avoidable tax bill.
Split year treatment on departure
An unplanned early return to the UK can also put at risk any split‑year treatment claimed for the year of departure. Split‑year treatment is only available where strict conditions are met. If you return to the UK earlier than anticipated, you may not meet all the relevant “case” conditions. As a result, your departure year may revert to being treated as a full UK‑resident tax year. This would mean worldwide income and gains arising after your departure could unexpectedly fall back into UK taxation.
Practical steps if you have returned to the UK
If you have been repatriated or have temporarily left the Middle East, we recommend you:
- Review your UK residence position immediately
You may still remain non‑resident, even if you stay in the UK for the rest of the tax year.
- Assess whether exceptional circumstances could apply
This requires careful, evidence‑based analysis, especially if you hold residency rights elsewhere or have multiple safe alternatives.
- If necessary, consider relocating to a third country
A short stay outside the UK before 6 April may preserve your non‑UK tax residence status and avoid TNR complications.
- Plan ahead for the 2026/27 tax year
The 60‑day limit for exceptional circumstances resets each year, and the duration of the conflict remains uncertain.
How PEM can help
The PEM private client team can assist in advising you on your residence position. We can identify any potential exposure arising from an unexpected return to the UK. Our experts will help you to understand your options and take practical steps to protect your position.
Please note that this content is not intended to give specific technical advice. It is designed to highlight some of the key changes rather than provide an exhaustive explanation of the topics. Professional advice should always be sought before action is either taken or refrained from as a result of information contained herein.
