The UAE: Inheritance considerations

This article will focus on some considerations for non-UAE nationals living in the UAE.

Inheritance matters in the UAE are governed by Sharia law. Generally, this will mean that each son of the deceased will be entitled to twice the share of a daughter and a wife is entitled to 1/8th of the property of the husband. This is subject to variation dependent on circumstances.

One of the concerns for the non-UAE national living in the UAE is whether the UAE courts would have jurisdiction in relation to inheritance related issues and whether their assets would be subject to UAE laws and regulations, in particular Sharia law.

Article 17 of the Civil Code provides that:

  1. Inheritance shall be governed by the law of the deceased at the time of his death.
  2. Property rights located in the territory of the State (i.e., the UAE) which belong to a non-UAE national having no heir shall become vested in the State.
  3. The substantive provisions governing testamentary dispositions and other dispositions taking effect after death shall be governed by the law of the state of which the person making such dispositions is a national at the time of his death.
  4. The form of wills and other dispositions taking effect after death shall be governed by the law of the state of which the person making such disposition is a national at the time the disposition is made, or the law of the state in which the disposition is made.
  5. The law of the UAE shall apply to wills made by non-UAE nationals disposing of their real property located in the State.

Article 18 of the Civil Code also provides that possession, ownership and other rights over property shall be governed by the location of the property in the case of real property, and movable property shall be subject to the law of the place in which such property is at the time when the cause resulting in the acquisition or loss of possession, ownership or other rights over the property arose. The law of the state in which property is located shall determine whether such property is real or movable.

So if we consider some of the key points of Article 17 and 18. Under a literal reading of the Civil Code, real property located in the UAE will be subject to UAE inheritance law and in turn to the jurisdiction of the Sharia courts. This remains true regardless of the nationality or religion of the deceased.

However the Civil Code, including the provisions relating to ownership of real property by foreigners, was enacted at a time when foreign ownership of real property in the UAE did not exist. Given that non-UAE nationals only began acquiring real property in 2002, this area of the law remains largely untested.

Unlike the English law, the UAE also do not recognise joint tenancy and the right of survivorship. For example, where a husband and wife own a house as joint tenants, under English law on the first death, the whole house would vest in the survivor. The presumption in the UAE is that if a property is owned jointly, the property is held in equal shares unless otherwise stipulated.

Where a joint bank account is held in the UAE this can prove problematic when one of the owners dies. The joint bank account may be frozen until the deceased accountholder’s estate has received probate. This can take over six months.

The Civil Code does provide that assets of non-UAE national residents located outside of the UAE will be governed by the inheritance laws of the applicable foreign jurisdiction.

However, this does not address the potential uncertainty regarding real property (i.e. a house) owned in the UAE. There may be ways to utilise offshore trusts or offshore companies to ensure certainty regarding real property ownership however, this would require specialist local legal advice.

The key for any non-national is to ensure they are aware of the local jurisdiction rules and how these may impact the ability to own and dispose of assets.

The information provided in this article is not intended to offer advice.

It is based on Old Mutual Wealth's interpretation of the relevant law and is correct at the date shown on the title page. While we believe this interpretation to be correct, we cannot guarantee it. Old Mutual Wealth cannot accept any responsibility for any action taken or refrained from being taken as a result of the information contained in this article.

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