UK tax residence exceptional circumstances: Middle East crisis impact

• Circumstances are beyond the individual’s control;
• Those circumstances prevent the individual from leaving the UK; and
• The individual intends to leave the UK as soon as those circumstances permit, and does so.

The legislation gives non‑exhaustive examples, including:

• A national or local emergency such as war, civil unrest or natural disaster; and
• A sudden or life‑threatening illness or injury.

Subject to the statutory conditions, a maximum of 60 days per tax year can be excluded on this basis. Any days beyond 60, regardless of how serious or prolonged the situation, will be treated as UK days for the purpose of determining an individual’s UK tax residency status under the SRT.

HMRC guidance (RDR3) emphasises that the exception is to be interpreted narrowly and applied on a case‑by‑case basis.

The situation in the Middle East is fluid and differs across countries. The UK Foreign, Commonwealth & Development Office (FCDO) issues travel advice which can be relevant in assessing whether circumstances are ‘exceptional’ for SRT purposes, but it is not determinative. The FCDO guidance may provide strong evidence of the risk level associated with remaining in a given country, but the SRT nevertheless requires an objective case-by-case assessment of whether the individual was prevented from leaving.

Broadly, three types of fact pattern are emerging:

1. Individuals usually based in a jurisdiction subject to “avoid all travel” advice

In some territories, the FCDO currently advises UK nationals to “avoid all travel”, or there may be active conflict, civil unrest or a comparable emergency. Examples (as at the date of this article) include certain areas such as Israel, Palestine, Iran and parts of Lebanon.

Where an individual who would normally live or work in such a location has temporarily returned to the UK or remained in the UK because of the crisis, there may be a strong argument that:

• The conflict and associated risks constitute exceptional circumstances for the purposes of the SRT; and
• Days spent in the UK solely as a result of those circumstances can be disregarded (up to the 60‑day limit), provided the individual leaves the UK as soon as it is reasonably practicable to do so.

Key points in this scenario:

• The individual should be able to demonstrate that, but for the crisis, they would not have been in the UK;
• Evidence may include employment contracts, residence arrangements, travel bookings, evacuation or repatriation notices and contemporaneous communications; and
• The individual would be required to actively monitor when it becomes possible to return and act promptly.

2. Individuals usually based in a jurisdiction subject to “avoid all but essential travel” advice

For other countries in the region, FCDO advice may be at the level of “avoid all but essential travel” including (as at the date of this article) some of the Gulf states such as the UAE, Qatar, Kuwait or Bahrain, but the position is evolving.

HMRC guidance suggests that such situations will not normally meet the threshold for exceptional circumstances where the individual is simply concerned about the situation or prefers not to travel. In particular:

• The fact that travel is discouraged but not prohibited will generally not, of itself, prevent an individual from leaving the UK; and
• Personal preference, employer policy, or a wish to avoid perceived risk – without more – are unlikely to fall within exceptional circumstances for the purposes of the SRT.

In this scenario, days spent in the UK may therefore be less likely to be disregarded under the exceptional circumstances rules. Each case, however, will turn on its facts.

3. Individuals unable to return due to significant travel disruption

Even where the FCDO advice is “avoid all but essential travel”, there may be situations where individuals are objectively unable to return to their usual country of residence because of:

• Widespread flight cancellations, airspace closures or severe capacity constraints;
• Closure of borders or local ports of entry; or
• Other specific logistical barriers that make return impossible or unsafe in practice.

In such cases, it may be necessary to consider whether:

• The individual is prevented from leaving the UK by circumstances beyond their control; and
• Those circumstances qualify as ‘exceptional’ for the purposes of exceptional circumstances for the purposes of the SRT.

Again, the 60‑day cap applies, and the individual must leave the UK as soon as they reasonably can, taking into account the actual availability of safe and practicable routes.

Individuals who are evaluating their UK tax position in light of the above may wish to consider the following actions:

• Assess UK tax residence exposure early;
• Analyse the factual matrix carefully;
• Gather and retain evidence supporting any potential ‘exceptional circumstance’s claim’;
• Monitor developments and reassess the position, including changes to FCDO advice, on an ongoing basis; and
• Consider interaction with wider tax considerations.

The Court of Appeal decision in A Taxpayer v HMRC [2025] EWCA Civ 106 provides important context, emphasising that:

• The exceptional circumstances provision is restrictive in scope;
• The test focuses on whether the individual is prevented from leaving the UK, not simply discouraged from travel; and
• A fact‑specific, objective assessment is required.

Notwithstanding the decision in favour of the taxpayer, the case demonstrates HMRC’s willingness to scrutinise claims closely, especially where individuals rely on preference, convenience or employer policy rather than clear external constraints.

Given the evolving nature of the Middle East crisis and the potential for further travel and security disruption:

• Whilst there has been no indication as yet, HMRC may issue updated guidance on how they expect the exceptional circumstances rules to operate in this context, as they did during the COVID‑19 pandemic; and
• We are likely to see increased focus on the documentation and evidential support behind any claim to disregard days under the exceptional circumstances rules.

Impacted individuals and, where appropriate, employers should take early advice, maintain robust records and keep their position under active review throughout the tax year.

We can assist with:

• Reviewing an individual’s UK residence status under the SRT;
• Assessing whether the exceptional circumstances rules may apply in light of the Middle East situation;
• Modelling the impact of different residence outcomes and advising on mitigating actions; and
• Preparing supporting analysis and documentation for HMRC, where appropriate.

For further information, please get in touch with the authors or your usual KPMG contact in our Global Mobility or Family Office & Private Client teams.

For further information please contact:

• Mike Lavan
• Gavin Shaw