The tax benefits that are available in the Dubai property market are attracting increasing numbers of investors to the emirate, reports Overseas Property Professional…

OPP describes Dubai as one of the most high-profile tax havens and states that many international property agents have urged British residents to consider the benefits of living abroad.

"Dubai is very popular with expats as there is no capital gains or income tax," Sarah Yaseen, managing director of overseas property agent Palm of Dubai, told OPP.

"This can save people thousands of pounds and provide for a very comfortable retirement."

Ms Yaseen explained that UK residents can get the most out of an investment in property in Dubai by electing their home there as their principal private residence.

Capital gains exemption

By varying this classification between their UK and their second home, investors can claim up to three years exemption on capital gains tax and letting relief.

Methods such as these would allow Dubai property investors to gain full benefit from the levels of capital appreciation and high rental returns that are on offer in the city, Ms Yaseen claimed.

Such advice from property agents follows a ruling in the UK that has changed the way HM Revenue & Customs calculates residency, which could result in many expats who spend most of their time abroad still paying full UK tax on their worldwide income and gains.