Gifting In The UAEWhen it comes to inheritance/succession planning in Dubai one of the most effective estate planning tools is the gifting of property.
At TWS we have extensive experience in advising on gifting property – where you can transfer your property via a process called “Gift Transfer” at the Dubai Land Department.
Gift transfers are very popular in Dubai for inheritance and succession purposes particularly as Sharia Law prevails.
Gifting property in the UAE typically refers to adding or removing a name from a title deed, thereby resulting in the ownership of the property being transferred into the name of another family member. This is typically due to the necessity to safeguard the property from certain inheritance regimes. Properties are gifted either within families or into offshore companies.
In order to qualify for a gift transfer, the property must be transferred among first degree relatives only, which means parents, or children. It does not include transfers between siblings. Property owners may choose to transfer property to certain family members in order to avoid the sharia law distribution that would otherwise result, and in order to simplify succession issues. For example, a husband may transfer his share of a property to his wife, in order to avoid his siblings from inheriting his share of the property. In other cases, a spouse is being removed as a result of a divorce settlement.
In those situations where the owners wish to maintain their ownership of the property, and yet avoid the sharia law application, a company set up is the recommended course of action. This way, the property can be transferred into the ownership of a company outside of the UAE, and thereby avoid the inheritance laws of the UAE. The company’s shareholders are the individuals who formerly owned the property, and therefore, they continue to indirectly own the property through an entity outside of the UAE. This type of ownership structure allows existing owners to continue to exercise control, and effectively ownership, of their properties in the UAE.
Due to the very low transfer fee for gift transfers, many individuals choose to go down this route. Company transfers are an especially effective tool for setting up a permanent estate planning regime for future generations, one that your children can continue to benefit from, and even transfer their future assets into as well.
If you are interested in protecting your estate in an effective way, please contact one of our expert at TWS Legal Consultants to discuss the option of gifting. Email us at firstname.lastname@example.org or call us on +971 4 448 4284