International Inheritance Tax Planning for Expats in the UAE
The UAE charges no inheritance tax. The UK still does, and if you hold UK property, investments or retain a UK domicile of origin, your estate faces a 40% charge at death regardless of where you live. IBISS & CO maps your cross border exposure and reduces it, legally, before your beneficiaries inherit the problem.
International Inheritance Planning for the Considered Expatriate
What Changed in April 2025 And Why It Affects You Now
The estate planning advice most Dubai expats received before 2025 is now out of date. HMRC abolished the domicile-based IHT framework on 6 April 2025.
End of Domicile as the Test
HMRC replaced the domicile framework entirely. Your liability to UK inheritance tax on non-UK assets no longer depends on your domicile. If you are a Long Term UK Resident, your worldwide estate faces 40% IHT above the nil rate band.
Long Term UK Resident Test
You are an LTR in any tax year where you have been UK tax resident for at least ten of the previous twenty years. The Statutory Residence Test measures this from April 2013 onward. Earlier years still count under pre-SRT rules.
The UK UAE DTA Gap
The Double Taxation Agreement between the UK and UAE covers income tax and capital gains tax only. It contains no provision for inheritance tax. There is no treaty protection available to Dubai-based expats against UK IHT during the tail period.
The IHT Tail HMRC Follows You When You Leave
Leaving the UK does not immediately remove you from the IHT net. The tail period extends your worldwide estate’s exposure for up to ten years after departure.
Who This Service Is For
Most expats in the UAE arrive here assuming the clean tax environment covers everything. It covers your income. It does not cover your estate.You likely have an inheritance tax exposure if you:
British Expats in Dubai With UK Assets
UK property, investments, or pension funds still in your name. Each carries IHT exposure under the new LTR framework.
- UK property held in personal name.
- UK investment portfolios and ISAs.
- UK registered business interests.
- UK pension funds (IHT exposure from April 2027).
Long-Term UAE Residents Who Have Not Checked Their LTR Status
There is a planning window, and it closes at ten years. If you are still within it, you have options. If it has closed, the conversation shifts entirely to mitigation.
- Years one through nine the window is still open
- Year ten and beyond restructuring is the only route
- The 10-year reset is available after consecutive non-UK residence
HNWIs With Assets Across Multiple Jurisdictions
Where assets span the UK, UAE, and third jurisdictions such as Jersey or the Channel Islands, a coordinated estate plan is essential. The lex situs rule does not coordinate automatically.
- Multi-jurisdiction asset footprints
- UHNW families using Channel Islands structuring
- Non UK, non Muslim expats facing forced heirship conflicts
UK Residents Returning From Dubai
Your IHT position changes the day you arrive back. The FIG regime provides relief on qualifying foreign income for up to four years if you have been non-UK resident for at least ten consecutive years. Act before you return.
- Four-year FIG regime for returning long-term non-residents
- LTR clock restarts on return to UK residence
- Timing of return is a planning lever, not just a logistics question
The Risks of Getting This Wrong
These are not theoretical scenarios. They are the outcomes we see when clients arrive without a plan already in place.
Your UAE Bank Accounts Can Be Frozen
Without a registered UAE will, UAE law governs your assets on death. Your UAE bank accounts, including joint accounts, can be frozen until the legal formalities resolve. Your spouse cannot access them immediately.
A DIFC will registered through the Wills Service Centre removes that default risk. Without one, the courts decide the outcome.
Existing Trusts May No Longer Work
Trusts set up under excluded property or domicile rules may have lost their protection entirely under the April 2025 changes. IHT exposure now depends on the settlor’s LTR status at each chargeable event, not the domicile status when the trust was created.
If your trust has not been reviewed since April 2025, it has not been reviewed under the current rules.
Your Children's Guardianship
Without a registered UAE will, a UAE court may make guardianship decisions for your minor children. A DIFC will specifies who raises your children if both parents die. That provision alone justifies registration for most parents.
Your Family Faces a Six-Month Bill
UK IHT is due within six months of death. The estate cannot defer it while probate resolves. If liquid assets are unavailable, property gets sold under time pressure, at whatever price the market offers at that moment.
What IBISS & CO Does for You
Every service listed below is available to international clients working with our Dubai team, in person or remotely.
LTR Status Assessment
We map your UK residence history year by year, calculate your precise IHT position under the 2025 regime, and tell you whether you are in a tail period, how long it runs, and whether the ten-year reset window remains available.
UK Asset Restructuring
Where you hold UK property or investments in your personal name, we work with your legal advisers to explore ownership structures, trust arrangements, and gifting strategies including BPR and APR action before the April 2026 caps take effect.
DIFC Will & UAE Succession
We advise on registration through the DIFC Wills Service Centre or Abu Dhabi Judicial Department, and coordinate your DIFC will with your UK will so neither document conflicts with or overrides the other. Guardianship provisions included.
Trust Review & Restructuring
A full assessment of existing structures against the LTR-based IHT rules introduced in April 2025. Where excluded property status no longer holds, we advise on restructuring, winding up, or alternative arrangements including Channel Islands structures for UHNW families.
Pension & Life Insurance Planning
QROPS assessment for removing UK pensions from the IHT estate. Whole of life insurance written in trust to cover the IHT bill. Pension restructuring ahead of the April 2027 changes that bring unspent funds within the taxable estate.
Cross-Border IHT Mitigation
For clients within the IHT net: potentially exempt transfers, annual gifting allowances, nil-rate band planning, spousal exemption elections under the 2025 LTR rules, and insurance-backed solutions where gifts and trusts alone do not close the gap.
London expertise Dubai presence
Most cross-border tax advice breaks down between two advisers who never fully connect. Our UK tax team and our Dubai team work within the same firm, on the same client file, at the same time.
We tell clients what we find. Not what they were hoping to hear. If the exposure is manageable, we say that. If it is serious, we show the numbers. what planning now costs against what inaction costs at the point of death.
— Private client, Dubai. Identity withheld.
Dual Jurisdiction Expertise
UK tax qualifications and Dubai regulatory knowledge in a single advisory team no translation, no gaps.
Senior Adviser Access
Every international estate review is handled by qualified advisers not passed down to junior staff after the first meeting.
Updated for 2025
Our advice reflects the April 2025 LTR regime, the April 2026 BPR/APR changes, and the April 2027 pension reforms not the rules that existed three years ago.
Compliant Structuring Only
We do not advise on artificial arrangements. Everything we recommend is built to hold up under HMRC scrutiny.
Book a Cross-Border Estate Review
We map your IHT position under the 2025 rules, calculate your current exposure, and outline the highest-priority actions available to you. In person in Dubai or remotely your choice.
Frequently Asked Questions
Do I pay UK inheritance tax if I live in Dubai?
Possibly. If you have been UK tax resident for at least ten of the past twenty years, your worldwide assets fall within the UK IHT net at 40% above the threshold. The UAE’s zero-tax environment does not override HMRC.
What is the IHT tail period?
When Long Term UK Residents leave the UK, their worldwide assets remain in the IHT net for between three and ten years after departure, depending on their prior UK residence history. Moving to Dubai does not immediately end the liability.
Does the UK UAE double tax treaty protect me?
No. The treaty covers income tax and capital gains tax only. It contains no provision for inheritance tax.
What is a DIFC will and do I need one?
A DIFC will is registered under a common law framework and governs how your UAE-based assets distribute on death. Without one, UAE default succession rules apply, accounts can be frozen, and your property may not pass to your intended beneficiaries. If you have a UK will, you still need a DIFC will and they need to be coordinated.
My trust was set up years ago. Is it still effective?
It may not be. Trust IHT exposure now depends on the settlor’s Long-Term Resident status at each chargeable event, not the domicile status when the trust was created. A review is the only way to confirm whether your structure still performs as intended.
Will my UK pension be subject to IHT?
Not under current rules. From April 2027, unspent defined contribution pension funds enter the taxable estate. If you hold a significant UK pension, planning ahead of that deadline is worth starting now.
How do I get started?
Contact our Dubai team to arrange a cross border estate review. We work with clients across the UAE in person and remotely.
Accountants Near me
Address:
- Office # AM06 Saraya Avenue, Al Garhoud, Dubai, UAE
Phone:
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