On Your Side: Salary rates should not be based on a calendar year

Plus questions about residency visas and property ownership, taxable assets after a divorce under UK law and obtaining a personal loan by a new arrival to the UAE, answered by The National's consumer advocate.

I have an unlimited employment contract with a company in the Jebel Ali Free Zone and have been with the company for 16 months. I am planning to submit my resignation because I have been offered a job outside the free zone. Will I get a ban from my current employer? Do I have to give 45 days' salary to my current employer because I have not completed two years of service? How would my gratuity and final benefits be calculated? NG, Dubai

Personal Finance On Your Side

The National's consumer advocate, Keren Bobker, answers your questions on legal and financial matters in the UAE and beyond.

The rules regarding bans do not apply within free zones, so you will not receive an employment ban. Because you are on an unlimited contract, you do not need to pay any compensation for ending it. All you need to do is give the required period of notice. The only exception is if you have signed a contract agreeing to repay any initial costs should you leave within a specific period of time. Because you are resigning before the end of three years' service, you are entitled to receive one third of the total gratuity payment you have accrued up to your final date of employment. For example, if you started work on May 1, 2010, and leave on September 30, 2011, you have accrued a total of 30 days' gratuity. To comply with the law, your employer must include 10 days' gratuity in your final settlement. Your final settlement should also include payment for any unused annual leave. Annual leave pay should include basic salary plus allowances and should be calculated on the basis of your contracted working hours. If you work five days a week, for instance, then one day of leave pay is 1/260th of your annual salary. This is worth pointing out because I have come across companies attempting to calculate a daily rate of salary on the basis of annual salary divided by 365, despite no one working every day of the year.

In 2005, I purchased three properties with a total combined value of approximately Dh1.4 million. These properties were marketed with a condition that the investor would be granted a three-year residency. In 2008, I was successfully granted a residence visa, which has now expired. The law regarding the issuance of residence visas for property investors has since been amended. According to the new laws, residence visas are now only issued to investors who own property with a minimum value of Dh1m. The sponsor has refused to renew my visa because they claim that at least one property has to have a minimum value of Dh1m, rather than the total value of my investment. Is it correct for the sponsor to interpret the law in this way, or am I entitled to a residence visa based on the total value of my property investments being more than Dh1m? YS, Dubai

I have spoken with the General Directorate of Residency & Foreigners Affairs, part of the Dubai Residency & Nationality Department, about this issue and it has confirmed that the property-related residency visa has to relate to the title deeds of just one property and this must have a value of more than Dh1m. In this case, YS is not eligible for a property-related visa.

My husband and I are getting divorced. As part of the legal settlement, I will be receiving a large sum of money. I am living in the UAE, but intend to return to the UK once the divorce is finalised and I have received my money. We own two properties in the UK and I will be given one of these outright, without a mortgage on it, as part of the settlement. I understand that soon after I move back, I will be considered to be a UK resident in respect of tax once again. Will I be taxed on the money I receive, or on the house? If so, what is the best way to reduce any tax liability? VA, Abu Dhabi

Under UK law, there is no tax liability on any of the assets transferred as part of a divorce settlement, so even if you become a UK resident once again you will not be subject to any tax on either the property or any monies that you receive. Once you take up UK residency, you will, however, be subject to income tax on any income, interest or rental income received.

My wife and I arrived in Abu Dhabi one month ago and have tried to get a loan to buy a car. When we went to our bank, we were told that it would not consider a loan until we have made at least three salary payments into our account. We asked if we could show our bank statements from our US bank and were told there was no way around it. Is this standard practice in the UAE? Can I get a loan from another bank? CB, Abu Dhabi

Banks are now stricter in offering personal loans than they were before the economic downturn. A bank will want to know that your job is permanent and that you are no longer on probation. It will require your salary to be paid into a current account with it before offering finance. There may be the odd exception, particularly if you have significant savings, but most banks in the UAE will work on a similar basis. If you use the same bank as your employer, they may be able to intervene to request loan facilities on your behalf, particularly because a vehicle loan is secured. But your employer may be asked to provide a guarantee. It is likely that you will need to wait a couple more months before purchasing a vehicle.

Keren Bobker is an independent financial adviser with Holborn Assets in Dubai. Contact her at [e-mail] or [e-mail]