Estate Planning in Dubai: Inheritance Rules and Key Considerations for UK Expats

While drafting a will in the UK may ensure that your assets are distributed according to your wishes upon your death, effective estate planning in Dubai requires careful consideration of factors such as local inheritance laws, the geographical location of your assets, and the distinct estate planning mechanisms available to foreigners within the UAE.

In this guide, we’ll provide an overview of the inheritance laws applicable in Dubai that may impact your estate plan. We’ll also explore instruments and strategies you may employ to ensure your assets are distributed in line with your intentions.

What You Need to Know About Inheritance and Succession Laws in Dubai

Dubai, and the UAE in general, operates a dual legal framework that incorporates both Sharia and civil law principles. As a result, inheritance and succession rules may differ significantly for Muslims and non-Muslims, as discussed below.

Muslims

Inheritance and succession matters for Dubai’s Muslim residents are governed by Sharia law, which mandates fixed shares of the estate for specific heirs, such as spouses, children, parents, and siblings, regardless of the deceased’s personal wishes.

Notably, Sharia law differentiates between male and female beneficiaries, with male heirs entitled to twice the share received by their female counterparts.

However, Muslims may exercise limited testamentary freedom by allocating up to one-third of their estate to persons other than their legal heirs, provided they register a will with the Dubai Courts.

Non-Muslims

Historically, the inheritance and succession affairs of non-Muslims in Dubai, including UK expats, were governed by Sharia law.

However, the introduction of Federal Decree-Law No. 41 in 2022 has established a dedicated legal framework for the UAE’s non-Muslim population, granting them the freedom to distribute their assets according to their personal wishes, provided a will is properly registered.

Non-Muslims in Dubai may register their wills through one of the following legal avenues:

• Dubai International Financial Centre (DIFC)
• Dubai Courts

The table below highlights the differences between the two types of wills:

If a non-Muslim expat in Dubai passes away without a valid will, their estate is distributed according to UAE law. The distribution follows a specific order of succession, as outlined below:

• Half of the property is inherited by the deceased’s spouse, while the rest is divided among their children.
• If there are no living spouses or children, the estate is shared equally between the deceased’s parents.
• If there’s only one living parent, they receive half of the estate, with the other half devolving equally to the deceased’s siblings.
• If there are no siblings, the surviving parent receives the entire estate.
• If there are no parents, the estate is shared equally among the deceased’s siblings.

Unlike Sharia law, which governs inheritance matters for Muslims, the UAE’s civil law provisions for non-Muslims do not differentiate between male and female heirs.

Dubai International Financial Centre (DIFC) Wills

DIFC wills are registered and administered by DIFC Courts, a Dubai-based judicial institution that operates independently from the UAE’s civil and Sharia court systems.

Originally established to address the commercial and civil dispute resolution needs of businesses operating in and out of DIFC, DIFC Courts also maintain jurisdiction over small claims, employment disputes, and inheritance matters of Dubai’s non-Muslim population.

Unlike other courts in Dubai, the DIFC Courts operate under a common law framework and conduct proceedings and judgments entirely in English, making them more accessible for international residents, particularly UK expats.

Registering a DIFC allows non-Muslims to distribute their assets as they wish upon death, without the default application of Sharia law. DIFC wills may cover a broad range of assets located around the world, including:

• Cash
• Investments
• Real estate
• Personal property
• Company shares

However, while DIFC wills can include worldwide assets, their enforceability outside the UAE depends on the local jurisdiction where those assets are held. It is advisable to seek legal advice to assess enforceability in each relevant country.

In addition to asset distribution, DIFC wills also provide for the appointment of temporary or permanent guardians for minor children.

To register a DIFC will, you must be a non-Muslim and at least 21 years of age. Before proceeding with registration, it’s essential to determine which type of DIFC will best aligns with your estate planning needs.

Types of DIFC Wills

There are five types of DIFC wills, as outlined in the table below:

How To Register a DIFC Will

The first step in registering a DIFC will is to gather all the necessary information and documents, including:

• A copy of your valid passport and government-issued photo ID
• Full personal and contact details of two witnesses over the age of 21
• Copies of documents that prove ownership of the assets included in your will, such as bank statements and property title deeds
• Details of your chosen executors and beneficiaries

With these details, you can register a DIFC will from anywhere in the world by following the steps outlined below:

1. Consult with expat financial advisers, like those at Titan Wealth International, to choose or draft a will that meets your estate planning needs.
2. Open the DIFC Wills Service online template portal and input all the mandatory information. The platform will draft the will and redirect you to the booking and payment page.
3. Make the payment and book your appointment.

The appointment is held via a video conferencing call, where you and your witnesses sign the will electronically.

You can sign the will in person by visiting the DIFC office in Dubai, but you’ll have to complete the electronic signing as well because the Wills Service doesn’t keep hard copies.

Probate Process

Probate is the legal process of validating a will and administering the testator’s estate. The process typically entails the following steps:

1. The executor submits the probate application form, witness statements, and a copy of the death certificate to the DIFC Courts.
2. The DIFC Wills Registry assigns a Case Progression Officer (CPO) as the executor’s point of contact during the probate proceedings.
3. The executor visits the DIFC Courts to sign the application and present the originals of the submitted documents.
4. The CPO submits the Grant of Probate Order to Dubai Courts for conversion into a Dubai Court judgment.
5. Dubai Courts’ Execution Department directs the relevant authorities, such as financial institutions, to distribute assets according to the DIFC Will.

The executor may hire a legal attorney to manage the entire probate process or assist in specific matters.

Other Estate Planning Instruments Available to UK Expats in Dubai

A DIFC will is a critical component of estate planning in Dubai, but relying on it solely may result in delays, particularly in the case of a prolonged probate process.

Moreover, a will doesn’t provide for the ongoing management of your estate, limiting your ability to control the timing and manner in which assets are distributed to beneficiaries.

To ensure greater efficiency and flexibility in transferring your wealth to beneficiaries, it is advisable to complement your DIFC will with additional estate planning tools such as trusts and life insurance policies.

These instruments can help streamline asset distribution in a tax-efficient manner, provide financial protection to your heirs, and support long-term wealth preservation.

Life Insurance

Investing in a life insurance policy during your lifetime enables you to protect and grow your wealth tax-efficiently, while ensuring that your beneficiaries receive a financial payout upon your passing.

This payout, known as the death benefit, can be used to cover immediate expenses like funeral and ongoing living costs. It can also help your heirs settle outstanding obligations like property loans and taxes without having to liquidate the assets from your estate to raise the necessary funds.

The insurance proceeds can also play a key role in succession planning. They can provide the means to buy out other beneficiaries or former partners from business interests or jointly held assets, thereby reducing the potential for disputes that may impact your family’s financial stability.

Trusts

A trust is a legal structure that allows you to transfer ownership of assets to a third party—a trustee—who manages and distributes them according to your instructions during your lifetime and upon your death.

A trust offers the flexibility to tailor your estate plan according to your specific wishes, allowing you to control when and how each beneficiary receives their inheritance. For instance, you might specify that the funds can only be accessed by your grandchildren when they reach the age of 21.

Trusts can play a vital role in estate planning, but it’s important to understand jurisdictional limitations in Dubai.

UAE mainland law does not formally recognise trusts in the same way as common law jurisdictions. Therefore, expats looking to establish trusts should use recognised jurisdictions such as:

• DIFC: Which has a robust trust law regime under common law principles
• Offshore jurisdictions: Such as the Isle of Man or Jersey, for broader estate planning solutions

You can establish a trust:

• Through a will (testamentary trust), taking effect after probate.
• Through a deed of trust (inter vivos trust), taking effect during your lifetime.

There are two general categories of trusts:

1. Revocable: A trust that you can change or cancel at any time. It becomes irrevocable after death.
2. Irrevocable: A trust that can’t be changed or cancelled after creation.

Other types of trusts include charitable, special needs, and testamentary trusts. Each serves a distinct purpose, so it’s advisable to consult with expat financial advisers, like those at Titan Wealth International, to choose the right trust and structure it according to your estate planning objectives.

Like life insurance, trusts distribute your assets without delays because the process doesn’t involve probate.

This not only expedites the wealth transfer process but also ensures a greater degree of privacy, as trust arrangements are not subject to public disclosure, unlike probate proceedings, which are part of the public record.

Estate Planning Considerations for UK Expats in Dubai

To create a comprehensive estate plan that protects your wealth and ensures its distribution aligns with your wishes in the event of death or incapacitation, it is essential to consider the following key factors:

1. Your tax residency status
2. Double wills
3. Major life events and legal changes

Tax Residency Status

As a UK expat in Dubai, you won’t be liable for tax on your local or global estate, as the UAE doesn’t impose any inheritance tax, irrespective of your residency status in the country.

However, you may still be subject to UK inheritance tax (IHT), depending on your UK residency classification:

• Long-term UK resident (LTR): An LTR is an individual who has been a UK tax resident for at least 10 out of the past 20 tax years. LTRs are subject to IHT on their worldwide estate, including assets held in Dubai.
• Non-long-term UK resident (non-LTR): A non-LTR is an individual who has been a UK non-resident for at least 10 of the previous 20 tax years. Their IHT liability is limited to assets located or registered in the UK.

Double Wills

It is advisable to maintain separate wills for your assets located in Dubai and the UK. This approach streamlines the probate process in each jurisdiction and reduces the likelihood of conflicts arising from differences in legal systems.

However, you should ensure that the provisions of each separate will are aligned and don’t contradict one another, as inconsistencies may lead to disputes and delays in the administration and distribution of your estate.

Major Life Events and Legal Changes

Regularly review and update your estate plan following major life events—such as marriage, divorce, birth of a child or grandchild, or the acquisition of substantial assets— to ensure that the plan remains aligned with your goals and intentions.

You also need to monitor tax and legal changes in Dubai and the UK and update your plan accordingly to maintain tax efficiency and compliance.