How the UK’s 2025 Autumn Budget will impact the Middle East

A Tax Strategy That Pushes Its Best and Brightest to the Middle East

The UK Chancellor’s Autumn Budget has been presented as a sober, responsible response to fiscal pressure. Britain is locking itself into the highest tax burden in its modern history, while simultaneously eroding the very incentives that keep entrepreneurs, investors, and global professionals anchored to the country.

As our recent Sovereign Group analysis of the Budget outlined in detail, the Treasury’s approach relies heavily on fiscal drag, the quiet freezing of thresholds that ensures tax revenues rise year after year without the political discomfort of raising headline rates. When combined with targeted hikes on dividends, savings income, property income, high-value homes, pensions, and trusts, it can only mean one thing - a slow but steady tightening around anyone with ambition, assets, or upward mobility.

It signals that the UK is becoming a less competitive and less predictable place to build wealth, to invest, and even to remain tax-resident.

The Autumn Budget delivers several high-impact measures that tighten the tax net around asset-holders, investors, and globally mobile families:

1. Income Tax & NI thresholds frozen until 2031 - Pulls millions into higher bands through fiscal drag.
2. Dividend tax increases from 2026 - Basic rate to 10.75%, higher rate to 35.75%, affecting business owners and investors.
3. Higher tax on savings and property income from 2027 - New 22% / 42% / 47% rates hit landlords, savers and retirees.
4. “Mansion tax” from 2028 - Annual levy of £2,500–£7,500+ on homes over £2m.
5. IHT thresholds frozen to 2031 - Ensures rising property values push more estates into liability.
6. Restrictions on salary-sacrifice pensions from 2029 - NI relief capped at £2,000, reducing long-term planning benefits.
7. Tighter rules for trusts and non-residents - Reduced flexibility for international wealth structures and offshore arrangements.

A Greater Outflow of Talent and Capital 

In our Sovereign Group report, we noted that these tax measures prompt the relocation of individuals, investors, and businesses to more favourable jurisdictions. The reaction from clients across Europe, Asia, and Africa has been clear.

As expected, we think this Budget will only encourage more individuals and businesses to move to the Middle East. Why?

Because jurisdictions such as the UAE, Qatar, and Saudi Arabia offer exactly what the UK is now pushing further out of reach:

• Zero or minimal personal income tax
• No tax on worldwide income, dividends, or capital gains
• A supportive regulatory environment for start-ups, family offices, and international businesses
• Modern infrastructure, political stability, and world-class connectivity
• No annual property wealth taxes
• Growing ecosystems for finance, technology, logistics, and high-net-worth residency

While the UK tightens its grip on higher earners and entrepreneurs, the Middle East continues to broaden its appeal, rolling out incentives, long-term visas, and business frameworks designed specifically to attract the globally mobile class from the UK and such other countries.

From DIFC and ADGM in the UAE, to the booming Saudi Vision 2030 hubs, to Qatar’s investment-friendly climate, the region is an “alternative” to the UK and for many, becoming a first choice.

The UK government insists that its tax strategy preserves fairness while protecting public services. But fairness is a relative concept in a globalised world. When other jurisdictions impose dramatically lighter tax burdens and provide pro-investment environments, the UK risks slipping further in competitiveness rankings.

At Sovereign Group, we have a front-row seat to how individuals, families, and companies react to policy shifts. Our advisory teams in London, Dubai, Abu Dhabi, Riyadh, Doha, and across our global network have seen a marked increase in requests related to:

• relocating tax residency
• establishing Middle East corporate structures
• setting up family offices
• transferring holding companies
• restructuring international businesses
• securing long-term visas and residency routes

The Autumn Budgets in 2024 and 2025 are far from slowing these enquiries; in fact, they have intensified them.

As the Chancellor leans ever more heavily on asset-holders, investors, and internationally connected professionals, many will simply choose to base themselves elsewhere.

And with the Middle East offering a compelling combination of tax efficiency, stability, and global opportunity, it is no surprise that more individuals and businesses are choosing UAE, Qatar, and Saudi Arabia not merely as tax havens, but as future hubs for growth.