Gifting of Property in UAE
When it comes to inheritance and succession planning in Dubai one of the most cost effective estate planning tools is the gifting of property.
At TWS Legal Consultants, 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 popular in Dubai for inheritance, tax structuring and succession purposes particularly as Sharia Law prevails in the region.
We are a multi-lingual firm, proficient in Sharia and non-Sharia law. Our lawyers are registered with the UK Solicitors Regulation Authority and the Dubai Legal Affairs Department and have robust knowledge of UK/UAE law and how it applies to expatriates in the UAE. As a niche firm, we are highly respected in the region for our wealth protection and preservation expertise.
Our team will take the time to understand your needs, offer the best solutions, and meticulously draft the required documents. We are a fully digital practice and can arrange meetings by video conference if preferred.
How do gift transfers work?
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. The goal is to safeguard the property from local inheritance regimes. Properties are gifted either within families or into offshore companies.
How can I transfer property within my family?
To qualify for a gift transfer, the property must be transferred among parents or children. Transfers between siblings are not permitted. Property owners may choose to assign a property to particular family members 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, to avoid his siblings from inheriting it. Transfers are also used to remove a spouse from the title following a divorce.
How can I transfer property to an offshore company?
In situations where the owners wish to maintain their ownership of the property, and yet avoid the Sharia law application, setting up an offshore company is the recommended course of action. This way, the property can be transferred into the ownership of a company outside of the UAE, thereby sidestepping the regions inheritance laws. The company’s shareholders are the individuals who formerly owned the property, and therefore, they continue to indirectly hold the property through a non-UAE corporate entity.
Due to the low transfer fee for gift transfers, many individuals choose to go down this route. Company transfers are an especially valuable 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.
What are the benefits of gifting property in Dubai?
Through the process of gifting, you are able prevent future property inheritance issues in the UAE. Doing so not only means Sharia law distribution need not take place but you have the freedom to choose the next owner of your property, thereby simplifying the inheritance/succession process.
By gifting your property now, you are also helping your chosen beneficiary to establish ownership in advance – something that can be difficult and complicated should you die intestate or unexpectedly.
Further by conducting a gift transfer instead of a sale and purchase transfer is it allows you to save on transfer fees. For example, in Dubai, there is a sale and purchase transfer fee equivalent to 4 per cent of the sale price. The gift transfer fee, however, only amounts to 0.125 per cent of the deemed property value or no less than AED 2,000.
Therefore, a gift transfer to your spouse or any immediate family members entails a significantly reduced transfer fee, while gifting to any other person outside of your immediate family attracts the higher standard transfer fee of 4 per cent.
How can TWS Legal Consultants help me?
The gift transfer process seems simple enough on paper. However, it can also become a lengthy and complicated affair, especially when the property owner (donor) or the beneficiary (donee) is unable to participate in or attend all the required formalities to facilitate the gift transfer.
In this jurisdiction, it will work to your advantage to have a legal expert representing and or advising you throughout the entire process.
TWS Legal Consultants can guide you during a gift transfer, whether it involves gifting property to your children, spouse, parents or company (and vice versa). We can handle the whole process for you.
If you are interested in protecting your estate in an effective way, please contact one of our private client team at TWS Legal Consultants to discuss the option of gifting: