Tax nomads: Rolling stones gather no moss… and no tax?
Andy Wood • September 5, 2024
Introduction – Tax Nomads
‘A rolling stone gathers no moss’ says the old proverb.
Broadly, it translates to the idea that a person who does not settle in one place will not accumulate wealth, status, responsibilities, or commitments.
Of course, some might say that at least half of these are a decided benefit!
But what, if any, are the advantages of being a ‘fiscal rolling stone’?
This is a question we’re being asked more and more.
In many scenarios, this is because jurisdictions are seeking to attract so-called ‘digital nomads’ or tax nomads to their shores as part of a land grab for the internationally mobile wealthy individual.
So, is there more than just better weather on offer?
What’s the plan?
The plan is rather appealing.
Swapping your home office desk to working from the beach? Swapping the grey skies and bitterly cold wind for a tropical climate?
Sign me up.
Indeed, with the improvements in technology, and perhaps a change in attitude to remote working, the practical side of being an overseas, digital worker has never been easier to achieve.
Traditionally, the tax nomad model has been to split one’s time between a number of carefully chosen countries, moving on before falling to being resident for tax purposes in the current jurisdiction.
In theory, at least, it is possible to wander the world, moving on before the relevant tax authority asks you to join their little club.
However, I am a cynic at heart.
There must be an inherent danger that, despite arguing that you are not resident for tax purposes in ANY jurisdiction, you end of with multiple jurisdictions chasing you for their ‘fair share’!
So my preferred route is to find yourself a low tax jurisdiction to make your home base and establish residency there (more on this later). Plant a flag there.
Additionally, this is likely to help on tax and more mundane things like being able to open a bank account. Financial Institutions tend not to like those of ‘no taxed abode.’
To summarise, our cunning plan is two pronged:
• Dis-establish UK residency by reference to the Statutory Residency Test; and
• Create a ‘home base’ in a favourable jurisdiction.
Dis-establishing UK residence
The first aim is to ensure one is no longer resident for UK tax purposes.
The Statutory Residence Test (“SRT”), with effect from April 2013, replaced the unsatisfactory, and frankly preposterous, position that meant one had to rely on a patchwork of case law.
If Elmer the elephant did tax policy, it would have been the pre 2013 UK approach to tax residence.
There are three tests and they apply as a waterfall.
If one finds safety in the first then there is no need to go on to the next.
If not, it is only then that one moves to the next.
The three tests are as follows:
1. Automatic overseas test: if this test is satisfied then the taxpayer is conclusively non-resident;
2. Automatic residence test: if this test is satisfied then the taxpayer is conclusively UK resident;
3. A sufficient ties test: if neither of the above tests are satisfied then one resorts to a day-counting test
This article is not focused on the SRT, so a detailed exploration of this subject is a little off topic. But you can find a helpful link to one that does here
However, generally, speaking, these tests will limit the amount of time one can spend in the UK and claim to be non-resident.
The statutory residence test is not always easy to apply. However, what it perhaps lacks in simplicity it does, generally speaking, provide a greater degree of certainty than under the old rules.
Of course, there are exceptions!
Tax implications of being non-UK resident
Where one is non-UK resident for tax purposes, then one should only have an exposure to UK tax on UK source income. For example, on UK rental income.
This position is further narrowed by ‘disregarding’ certain UK income sources (including dividends from UK companies) from tax where the recipient is non-UK resident.
Further, one will only be in the scope of UK capital gains tax on the disposals of UK real estate, whether directly or indirectly held.
For both income and capital gains tax purposes, there are anti-avoidance rules which might create tax liabilities where the individual subsequently becomes UK resident within 5 years (and one should never underestimate how long 5 years is).
Choosing a home base?
Assuming one is not going to continually move from one jurisdiction to another, then one next needs to choose a tax base. This is the place where one is putting a flag in the ground and saying ‘yep, this is my home’.
Of course, you might use this as a jumping off point to visit other countries (and note, one would not want to become resident in those countries).
However, constructing a tax base where one is liable to tax does not necessarily mean that you rolling stone dreams have been thwarted.
There are many jurisdictions around the world where one might become resident for tax purposes but can broadly live tax-free from much of your foreign income – only suffering local tax on local source income.
For example, one can qualify under Cyprus’ non-domicile regime if one spends as little as 60 days a year in the UK. Generally speaking, income derived outside of Cyprus is not taxable in Cyprus.
Dubai is another very popular jurisdiction. It is not correct to say it is a no tax jurisdiction. VAT has been payable by GCC states for a few years and the UAE introduced corporate income tax (top rate 9%) in June 2023. However, there is still no personal tax, which is an ideal position for the nomadic world citizen.
Barbados is a more recent popular destination for digital nomads due to its special ‘Welcome’ visa. Again, only Barbados source income is subject to local tax along with foreign income and gains to the extent it is enjoyed on the Island.
Previously, one could also become resident in Portugal and avail oneself of the Non-Habitual Residence (“NHR”) regime. This broadly provided for a 10-year exemption on certain foreign income and gains.
As I’m not a travel agent, I’ll stop there.
Employer beware!
Finally, an employer cannot simply leave its employees to set up and start working remotely from a beach hammock without the fear of any consequences.
They will need to ensure that they deal with their employee properly from a payroll perspective.
However, in addition, they will need to ensure that the employee does not inadvertently create any taxable presence in the country in which they are staying.
Conclusion
To conclude, it is certainly possible to be a tax nomad.
However, my preference is to actually plant a flag in the sand somewhere and create a tax home base.
My opinion is that this will assist in mitigating the chances that you have multiple tax authorities on your tail which might be the case where you have not created that tax base.
Following this plan will also tick some more boring boxes such as more readily being able to open bank accounts and purchase other financial products.
Even so, and obviously depending on your circumstances, it should be possible to limit one’s tax liabilities.
Hopefully, unlike the Rolling Stones song, this will give you some satisfaction.
If you have any queries about tax nomads or tax matters in general, then please get in touch.
If you’ve been hearing more about private banks, investment advisers, and wealth managers setting up shop in Dubai, you're not imagining it. Dubai has become one of the fastest-growing wealth hubs in the world, especially for British and European advisers. In the last year alone, over 60 new wealth management firms have opened offices in Dubai’s International Financial Centre (DIFC). But why is this happening, and what does it mean if you're a high net worth individual , entrepreneur, or investor living in the UAE? Why Dubai? Dubai offers something many wealth managers are now struggling to find elsewhere: a stable, tax-efficient , and business-friendly environment. While the UK has tightened its tax rules , especially for non-doms and those using trusts or complex structures, the UAE has continued to attract wealth with: 0% personal income tax No capital gains tax A strong legal framework under English common law (via DIFC) High quality of life and global connectivity For clients, this makes Dubai an appealing base. For wealth managers, it’s an opportunity they can’t ignore. What Wealth Managers Are Offering in Dubai With this surge in presence comes increased service availability for clients. If you're living in the UAE or spending part of the year here, you can now access: Discretionary investment management Estate and succession planning Family office services Tax-efficient structures and cross-border advice Advice on UK IHT (Inheritance Tax) and pensions These services used to be hard to find locally, but not anymore. Who's Coming to Dubai? The influx includes private banks and traditional discretionary fund managers, but also: Boutique investment firms Wealth tech platforms (offering digital tools for investing) Global tax advisers The DIFC now hosts more than 410 wealth and asset management firms, up from 350 the previous year. New entrants include British firms reacting to UK tax changes and seeking to serve their clients abroad. Why It Matters to UAE Residents If you’re based in the UAE, especially as a British expat or someone with international assets, this is a golden opportunity to get high-quality wealth advice locally. Key reasons to take action now: UK tax changes are affecting British expats Inheritance planning is more important than ever The local market now has more competition, which often leads to better client service You no longer need to fly to London or rely on Zoom calls to manage your finances; top-tier advice is available here in Dubai. Questions You Should Be Asking Is my current investment portfolio set up for UAE tax rules? How will UK inheritance tax apply to my estate? Should I structure assets through an offshore trust or foundation? Is my UK pension protected and efficient? Could I benefit from working with a local adviser who understands both the UAE and UK systems? Final Thoughts Dubai is no longer just a luxury destination or business stopover; it’s now a full-fledged global wealth centre. With top international firms setting up operations here, clients in the UAE now have access to world-class advice right on their doorstep. Whether you’re planning for retirement, protecting family wealth, or exploring new investment opportunities, this is a perfect time to act. At Mosaic Chambers Group, we specialise in helping UAE-based clients structure, grow, and protect their wealth. From inheritance planning to UK tax exposure, our team of dual-qualified advisers can offer practical advice with no jargon. Contact us today to book a confidential conversation with one of our experienced UAE wealth advisers.
We all think about the future, but how many of us feel confident about our retirement savings? In the UAE, that question is becoming more urgent. A new report shows that more people in the UAE, especially experienced employees and professionals, are asking for better, more personalised retirement planning. They don’t just want end-of-service benefits. They want flexibility, investment choices, and long-term financial security. This shift is important. It’s not just about pensions . It’s about how people feel about their jobs, their financial freedom, and their lives after work. What the Report Found The research, carried out by recruitment experts in the UAE, found that: Many mid-to-senior-level professionals now want a tailored approach to retirement savings. People are asking employers for more investment options, not just a lump sum at the end. There is a growing interest in structured retirement accounts, including schemes where employers contribute monthly, like pensions in the UK or US. It’s a signal that the typical end-of-service benefit (gratuity) may no longer be enough for the modern workforce. The Current Retirement Model in the UAE Right now, most private sector workers in the UAE receive an End-of-Service Benefit (EOSB). This is a lump sum based on how long you've worked for your employer and your final salary. But: It’s not invested, so the value doesn’t grow with time. You only receive it when you leave the company. If a company closes down or faces financial trouble, you may lose out. While the UAE has made improvements, such as introducing savings-style EOSB schemes, many companies still use the traditional model. Why Employees Are Asking for More Here are just a few reasons UAE professionals want better retirement planning: 1. Job Security Is Less Certain People change jobs more often than they used to. Relying on a lump sum after years of service isn’t practical for mobile careers. 2. Higher Earnings = Higher Expectations Professionals in sectors like tech, finance, and consulting are earning more, and they want retirement planning to match their income and ambitions. 3. Inflation and Cost of Living Even in a tax-free environment, the long-term cost of living matters. A static lump sum at the end of your career doesn’t keep up with real-world inflation. 4. More Global Workers Many people in the UAE have worked in multiple countries. They’re familiar with international pension schemes, and they want similar options here. What Are the Alternatives? Several companies and free zones in the UAE are already offering new models for retirement planning: Monthly savings schemes with employer contributions Access to regulated investment funds tailored to retirement Portable savings accounts that follow you between jobs Dubai International Financial Centre (DIFC) launched the DIFC Employee Workplace Savings (DEWS) Plan, which has been a model for reform. Other areas may follow suit. What You Can Do Whether your employer offers advanced schemes or not, you can still take control of your retirement plan: Start a private pension or regular investment plan with expert advice Set up a monthly savings goal, even if it’s small to start Ask your employer if they’re willing to make monthly contributions Consider tax and currency implications if you plan to retire abroad Final Thoughts The way people think about retirement in the UAE is changing, and fast. It’s no longer about waiting for a lump sum and hoping it’s enough. UAE residents want to invest, plan ahead, and build financial independence while they’re still working. If you're living and working in the UAE, the best time to plan for retirement isn't when you're 60. It’s now! We help people across the UAE, UK and other jurisdictions set up private pension plans, understand retirement investments, and structure savings that work whether you retire in Dubai, UK or move abroad. Speak to one of our advisers today for clear, practical help with your long-term planning.