As Dubai continues to establish itself as a wealth and asset management hotspot in the international finance landscape, it is essential for expatriates and non-Muslims with assets in the region to consider their estate planning options. This article aims to provide a comprehensive guide to the growing importance of the United Arab Emirates (UAE), particularly Dubai and the Dubai International Finance Centre (DIFC), and the various estate planning options available to different communities.
Dubai and the DIFC: A Global Finance Hub
The UAE’s D33 strategy has successfully transformed Dubai into a leading finance centre in the MENA region. The DIFC, a special economic zone within Dubai, has played a crucial role in this transformation, attracting high and ultra-high-net-worth families to establish a presence in the Emirate. With an increasing asset base in Dubai, it is vital for these individuals to incorporate their assets into their global tax and estate plan strategies.
Navigating Succession Laws in the UAE
The UAE makes a distinction between Islamic and Non-Islamic individuals when it comes to succession laws. For Muslims, Sharia Law is applied in the absence of a will, while non-Muslims can choose the laws of their nationality to govern the succession of their Emirati assets. In particular, UK expats are afforded the opportunity to apply English law, which offers testamentary freedom and allows for tailored estate planning.
Estate Planning Options for Islamic Clients
For those looking to prepare Sharia-compliant wills, trust structures are commonly used to ensure the estate passes in accordance with Sharia principles. In some cases, individuals may opt for corporate structures or foundations to provide beneficiaries with certainty over their inheritance.
Estate Planning Options for UK Expats (Non-Muslims)
UK expats in the UAE can benefit from applying English law to their Emirati assets, enabling bespoke estate plans that take into account the needs of beneficiaries and potential global taxes. This is particularly important for UK-domiciled and deemed-domiciled individuals who may be subject to UK inheritance tax. Many expats have chosen to structure their global estate through jurisdictions such as the Channel Islands, streamlining their estate planning across multiple jurisdictions while residing in Dubai.
Estate Planning Options for Non-UK Expats (Non-Muslims)
Non-UK, non-Muslim expats in the UAE can also explore alternative estate planning options, such as obtaining UK nationality and electing English law to govern their Emirati assets. This can help circumvent forced heirship laws in their country of origin while allowing for tax-efficient structuring.
Navigating estate planning in the UAE can be complex, but with the right guidance and support from experienced professionals, expats can successfully protect their assets and ensure their wishes are carried out upon their passing. Take help from consultancies such IMC Group to ensure the process is smooth and you get the best guidance navigating the laws.
