If you are a UK agency founder who has moved to Dubai, or is considering it, the 90 day rule is probably the single most important tax rule you need to understand. It determines whether HMRC still sees you as UK resident. And if they do, any gain from selling your agency shares could be taxed in the UK at up to 24%.
Here is exactly how the 90 day rule works, how it applies to your agency shareholding, and what you need to track to protect your tax position.
What Is the 90 Day Rule?
The 90 day rule is part of the UK’s Statutory Residence Test (SRT). It is the rule that says if you spend 91 days or more in the UK during a single tax year (6 April to 5 April), you are automatically UK resident for that year. No exceptions. No discretion.
If you spend 90 days or fewer, you may still be UK resident under other parts of the SRT. But 91 days is a hard line. Cross it, and you are resident. Full stop.
For agency founders who have left the UK for Dubai or another jurisdiction, this rule is what stops you from spending too much time back in the UK visiting family, attending client meetings, or working from your old office.
How the 90 Day Rule Applies to Your Agency Shareholding
Here is where it gets specific for agency founders. If you sell your shares in your agency while you are UK resident, the gain is subject to UK Capital Gains Tax (CGT). If you sell while non-resident, the gain is generally outside UK tax, provided you have been non-resident for at least five full tax years before the sale.
The 90 day rule is what determines your residence status in the year of sale. If you sell your shares in January 2027, HMRC looks at your days in the UK for the 2026/27 tax year. If you hit 91 days, you are resident. The gain is taxable in the UK.
That is why agency founders moving to Dubai need to track their UK days meticulously. A few too many trips back for board meetings, client pitches, or Christmas with family can cost you tens or hundreds of thousands in tax.
A Worked Example
Take a digital agency founder who moved to Dubai in April 2025. They sell their agency for £2 million in February 2027. Their shares were acquired for £1. The gain is £1,999,999.
If they are non-resident in 2026/27, the gain is outside UK tax. If they accidentally spend 95 days in the UK during that tax year, they are UK resident. The gain is taxed at 24% (the higher rate CGT for non-residential property and shares). That is £479,999.60 in tax.
Ninety-five days versus ninety days. Five extra days. Nearly half a million pounds difference.
That is the stakes.
How Days Are Counted
HMRC counts any day where you are in the UK at midnight. Arrive at 11pm and stay until 2am? That counts as a day. Leave at 6am? That day does not count, because you were not in the UK at midnight.
There are some exceptions. Transit days (where you are in the UK for less than 24 hours and do not work) do not count. Days spent in the UK due to exceptional circumstances (a family emergency, for example) may be disregarded, but HMRC applies this very narrowly.
For agency founders, the practical rule is simple: if you are in the UK at midnight, it counts. Plan your travel accordingly.
What About the 30 Day Rule for Full Non-Residence?
There is a separate rule for the first year of non-residence. If you leave the UK partway through a tax year, you must spend fewer than 30 days in the UK in that year to be treated as non-resident from your date of departure. If you exceed 30 days, you are resident for the whole year.
This matters for agency founders who leave mid-year. If you move to Dubai in September 2025, you cannot come back for more than 29 days before 5 April 2026. If you do, you are UK resident for the whole 2025/26 tax year.
After that first year, the 90 day rule applies for each subsequent tax year.
Does the 90 Day Rule Apply to My Shareholding Specifically?
Yes. The rule applies to your residence status, which determines whether your worldwide gains are taxable in the UK. Your agency shares are a worldwide asset. If you are UK resident when you sell them, the gain is taxable.
There is a specific anti-avoidance rule for shares in companies that are "UK property rich", but for a standard agency that rents its office and does not own property, this is rarely relevant.
The key point: your shareholding does not get special treatment. The 90 day rule applies to you as an individual, and your residence status determines the tax treatment of the sale.
What If I Hold Shares Through a Holding Company?
Some agency founders set up a holding company structure before moving to Dubai. The idea is that the holding company owns the trading agency shares, and the founder owns the holding company. When the agency is sold, the gain is in the holding company, not the individual.
This can work, but it is not a free pass. If you are UK resident, the holding company is UK resident too (because it is incorporated in the UK or centrally managed and controlled here). The gain in the holding company is subject to UK corporation tax at 25%.
If you are non-resident, the holding company may still be UK resident if its management and control remain in the UK. HMRC looks at where board meetings happen, where strategic decisions are made, and where the directors are based.
A holding company structure can be effective, but it requires careful planning. It is not a simple workaround to the 90 day rule.
Practical Steps for Agency Founders Moving to Dubai
1. Track Your Days From Day One
Use a spreadsheet or an app. Record every arrival and departure. Include flight details. This is your evidence if HMRC ever queries your residence status.
We recommend keeping a physical or digital diary for the first 12 months. After that, you will have a pattern and can be more relaxed, but never stop tracking entirely.
2. Plan Your UK Visits Around the Tax Year
The tax year runs 6 April to 5 April. If you know you will be in the UK for Christmas and New Year (say 20 December to 5 January), that is 17 days. If you also attend a client conference in March for 5 days, you are at 22 days. That is fine. But if you add a summer trip, a birthday visit, and a board meeting, you can quickly hit 60, 70, or 90 days.
Map out your expected UK days for the full tax year before you book anything. Leave headroom.
3. Avoid Working in the UK
Working in the UK while visiting can create additional complications. If you are working for your agency while physically in the UK, HMRC may argue you are "carrying on a trade" here, which can create a UK permanent establishment for your non-UK company.
If you must work while in the UK, keep it to a minimum. Do not take client calls. Do not sign contracts. Do not attend board meetings. Treat your UK visits as personal time.
4. Consider the Timing of Your Share Sale
If you plan to sell your agency, do it in a tax year where you are clearly non-resident. That means fewer than 91 UK days in that year, and ideally fewer than 30 in the first year of departure.
If the sale is likely to happen in a specific year, plan your UK visits around it. Do not book a two-week trip to London in January if the sale is completing in February.
5. Get Professional Advice Before You Move
The 90 day rule is straightforward on paper. In practice, it interacts with other rules, the 30 day rule, the "sufficient ties" test, the overseas workday relief rules, and the temporary non-residence rules.
As ICAEW qualified accountants, we work with agency founders moving to Dubai and other jurisdictions. We help them structure their departure, track their days, and plan their share sale to minimise UK tax.
If you are considering a move, speak to us before you go. A conversation now can save you six figures later.
What Happens If You Breach the 90 Day Rule?
If you accidentally spend 91 days in the UK, you are UK resident for that tax year. HMRC will expect you to file a UK tax return and declare your worldwide income and gains. That includes the gain from any share sale in that year.
If you do not file, HMRC can open an enquiry. They can charge penalties and interest. In serious cases, they can pursue criminal prosecution for deliberate non-compliance.
The best approach is to avoid the breach entirely. But if it happens, tell your accountant immediately. There may be steps you can take, though none are guaranteed to reverse the residence determination.
Summary
The 90 day rule is the hard line in the UK Statutory Residence Test. Spend 91 days or more in the UK in a tax year, and you are UK resident. For agency founders, that means any gain from selling your shares is taxable in the UK.
If you are moving to Dubai, track your days meticulously. Plan your UK visits around the tax year. Avoid working while in the UK. And time any share sale for a year where you are clearly non-resident.
Get advice before you move. The rules are clear, but the consequences of getting them wrong are severe.
Contact us if you are an agency founder considering a move to Dubai. We can help you structure your departure and protect your share sale from UK tax.