Recent legal changes in the UAE, the UK, and Dubai have altered inheritance and estate-planning risks for expatriates in Dubai, especially British nationals with UAE assets. The combined effect is that unregistered wills, outdated non-dom planning, and older DIFC will structures may no longer produce the outcomes families expect.
UAE Succession Law Changed From January 2026
On 1 January 2026, Federal Decree-Law No. 51 of 2024 and Personal Status Law No. 41 of 2024 came into force.
These laws significantly changed succession rules for expatriates in the UAE.
The most serious change applies where a foreign resident dies in the UAE:
- Without a valid will; and
- Without identifiable legal heirs.
In that situation, UAE-based assets such as bank accounts, real estate, and business shares will no longer remain in legal limbo through years of court proceedings. Instead, the assets will be converted into a charitable endowment, or Waqf, and transferred to approved foundations for public interest purposes.
For families outside the UAE who expected to inherit, this is the legal default if there is no valid will and no identifiable heirs.
Where heirs do exist but no will has been registered, the new framework sets a default distribution:
- The surviving spouse receives 50% of the estate.
- The remaining 50% is divided equally among the children, regardless of gender.
This may appear reasonable for some families, but it is still the law’s default outcome, not necessarily the deceased person’s wishes.
For example, if a person intended to leave a specific Dubai property to one child, that intention would not control the outcome without a registered will.
The UAE reforms have made succession clearer for expatriates, but clearer default rules are not the same as personal estate planning. The changes make a registered will more important, not less.
UK Inheritance Tax Changed From April 2025
For British expats in Dubai, the UK inheritance tax change may have the largest financial impact.
From 6 April 2025, the UK replaced its domicile-based inheritance tax system with a residence-based system.
Previously, British nationals who had lived abroad long enough and acquired a domicile outside the UK could hold assets worldwide without those assets being subject to UK inheritance tax at 40%.
Under the new rules, the key test is residency history rather than domicile.
A person becomes a Long-Term Resident for UK inheritance tax purposes if they have been UK tax resident for 10 or more of the previous 20 tax years.
On death, a Long-Term Resident’s worldwide estate may be exposed to UK inheritance tax at 40%, including:
- Dubai real estate
- UAE bank accounts
- Investment portfolios
- Overseas company interests
- Other global assets
The change affects many British nationals who built wealth in the UAE based on the old non-dom rules.
For example, a British expat who moved from the UK to Dubai in 2015 may not yet be a Long-Term Resident, depending on their residency history. Someone who moved before 2015 may already have crossed the threshold.
The new rules also include an inheritance tax “tail.” This is a sliding period after leaving the UK during which worldwide assets can remain exposed to UK inheritance tax.
For example, someone who lived in the UK for 20 years and moved to Dubai five years ago may still remain exposed to UK inheritance tax on global assets for up to 10 years after departure.
The UK-UAE double tax treaty covers income tax and capital gains tax, but it does not cover inheritance tax. There is no treaty relief for inheritance tax.
This means estate plans built around the old non-dom rules may need review, including:
- Excluded property trusts
- Offshore holding companies
- Structures designed to sit outside the UK tax net based on domicile
- Other arrangements built on pre-2025 assumptions
The article’s main warning is that structures based on old domicile rules may still work, or may not, but they should not be assumed to remain effective without review.
DIFC Courts Framework Changed From March 2025
In March 2025, Dubai Law No. 2 of 2025 was issued, consolidating and modernising the legislative framework governing the DIFC Courts.
This matters because the DIFC Wills Service, used by non-Muslim expatriates to register wills covering Dubai assets, operates under the DIFC Courts.
The reform is described as broadly positive because it strengthens and streamlines the judicial framework.
However, anyone with an existing DIFC Will should confirm that the will remains properly structured under the updated framework, especially if it interacts with:
- Offshore structures
- International assets
- Trust arrangements
- UK inheritance tax planning affected by the April 2025 changes
What Expat Families Should Review
The three changes create overlapping risks across UAE succession law, UK inheritance tax, and Dubai estate-planning procedure.
For UAE residents without a registered will, the new UAE succession framework makes the issue urgent. Without planning, UAE law will determine the result, and the outcome may not match the family’s intentions.
For Dubai assets, a DIFC Will may be relevant. For Abu Dhabi assets, an Abu Dhabi Judicial Department Will may also be needed where applicable.
For British nationals in the UAE, the UK inheritance tax position should be assessed based on actual residence history.
Key points to review include:
- Whether the person is already a UK Long-Term Resident
- Whether they are approaching the 10-out-of-20-year threshold
- How long any UK inheritance tax tail may last
- Whether existing trusts or offshore structures still work under the new rules
- Whether UAE assets are exposed to UK inheritance tax
- Whether wills in the UAE and elsewhere coordinate properly
The planning options available before crossing the Long-Term Resident threshold may be more flexible than those available afterward.
The central risk is assuming that old estate-planning structures still work. The UAE succession rules, UK inheritance tax rules, and DIFC Courts framework have all changed. Expat families with UAE assets, UK connections, or older wills should review their estate planning under the current legal framework rather than relying on assumptions made before 2025 and 2026.
Source article: knightsbridge.ae
