Inheritance Tax and UK Expats in the UAE (2026)

The United Arab Emirates levies no inheritance tax, no estate tax and no death duty on assets passing on death, regardless of the nationality or residence of the deceased. For British expats living in Dubai, Abu Dhabi or the wider Emirates, that does not close the matter. UK inheritance tax (IHT) can still reach UK assets and, depending on residence history, a person's worldwide estate. Succession of UAE-located assets is a separate question governed by local law.

This article sets out how the two systems interact in 2026: where the UAE charge sits at zero, where the UK charge can still apply, and why a registered will matters when the local default is Sharia-based succession.

• The UAE imposes no inheritance, estate or death tax on assets passing at death.
• UK IHT still applies to UK situs assets (such as UK property and UK shares) whatever your residence status.
• Since 6 April 2025 UK IHT is residence-based, not domicile-based; a long-term resident is exposed on worldwide assets.
• The UK nil-rate band is £325,000 and the residence nil-rate band up to £175,000, both frozen to 2030/31.
• From 6 April 2027 most unused UK pension funds are due to fall within the scope of IHT.
• Without a registered will, a non-Muslim's UAE assets may pass under Sharia-based rules; DIFC and ADGM wills allow an opt-out.

The UAE charge: zero on death

The UAE does not operate an inheritance tax, estate tax or death duty. Assets located in the Emirates, including bank balances, listed shares, physical cash and real estate, are not taxed when they pass on death. This applies to residents and non-residents alike. The main transactional cost to be aware of is a property registration fee when title is transferred, rather than a tax on the estate itself.

The absence of a UAE death charge does not remove obligations elsewhere. Beneficiaries and estates may face tax in the country where the deceased was tax resident or where assets are situated. For British expats, the relevant question is usually the reach of UK IHT.

How UK inheritance tax still reaches expats

Two routes bring UK IHT into play. The first is asset location. UK situs assets, meaning assets legally located in the UK such as UK residential or commercial property and UK-listed shares, are within the scope of UK IHT whatever the owner's residence or former domicile. Moving to the UAE does not take a UK house or UK share portfolio outside the UK net.

The second route is residence history. From 6 April 2025 the UK replaced the domicile-based system with a residence-based regime. An individual is a long-term resident if they have been UK tax resident for at least 10 of the previous 20 tax years, and at that point their worldwide estate is within the scope of UK IHT. Exposure does not end immediately on departure. A post-departure period, sometimes called the IHT tail, keeps a former long-term resident in scope for between three and ten years depending on how long they were resident.

The standard nil-rate band is £325,000. An additional residence nil-rate band of up to £175,000 can apply where a main residence passes to direct descendants, subject to a taper for larger estates. Both thresholds are frozen until the end of the 2030/31 tax year. The rate above the available threshold is generally 40 per cent. A further change is scheduled: from 6 April 2027 most unused pension funds and pension death benefits are due to be brought within the scope of IHT, with certain death-in-service and dependants' scheme pensions excluded.

Succession of UAE assets: the will question

Tax and succession are distinct. Even with no UAE death tax, the law that decides who inherits UAE-located assets still applies. Federal Decree-Law No. 41 of 2022 changed the default for non-Muslims, but the practical position for many expats remains that, absent a clear and recognised will, distribution of UAE assets can fall to be determined under Sharia-based principles. Those fixed shares may not match the deceased's wishes or the pattern expected under the law of their home country, particularly for spouses.

Non-Muslim expats can opt out of the local default by registering a will through the DIFC Courts Wills Service in Dubai, which operates within a common-law framework, or through the Abu Dhabi Global Market (ADGM) courts. Registration through Dubai Courts or the Abu Dhabi Judicial Department is also available. A registered will can direct how UAE assets pass and can help avoid the freezing of local bank accounts and disputes during probate.

Coordinating the UK and UAE positions

A British expat in the UAE typically has assets on both sides: a UK pension, perhaps UK property, and UAE bank accounts or local real estate. The UK estate question turns on situs and residence history; the UAE succession question turns on whether a recognised will is in place. The two are addressed by different instruments, and a will valid in one jurisdiction does not automatically govern assets in the other. Reviewing where each asset sits, the current residence position, and how UK thresholds and the 2027 pension change apply is the practical starting point.

This article is for general information only and does not constitute financial, tax or regulatory advice. Kaeltripton.com is not authorised or regulated by the FCA. Pension and tax rules differ by country of residence and change over time. Verify any figure with official sources such as GOV.UK, HMRC or the FCA, and take advice from a suitably authorised adviser in your country of residence before acting.

FAQ

Does the UAE have an inheritance tax in 2026?

No. The UAE levies no inheritance tax, estate tax or death duty on assets passing at death, for residents and non-residents alike. The principal transactional cost is a property registration fee on transfer of title.

Can UK inheritance tax still apply if I live in Dubai?

Yes. UK situs assets such as UK property and UK shares remain within the scope of UK IHT regardless of where you live. If you are a UK long-term resident, your worldwide estate can also be in scope.

What is a UK long-term resident for IHT?

Since 6 April 2025 a long-term resident is someone who has been UK tax resident for at least 10 of the previous 20 tax years. Such a person is within the scope of UK IHT on worldwide assets, with a post-departure tail of three to ten years.

Will my UK pension be subject to inheritance tax?

From 6 April 2027 most unused UK pension funds and pension death benefits are due to be brought within the scope of UK IHT. Certain death-in-service and dependants' scheme pensions are excluded under the announced rules.

What happens to my UAE assets if I die without a will?

Without a registered will, a non-Muslim expat's UAE assets may be distributed under Sharia-based principles, which can differ from your wishes. Non-Muslims can register a will through the DIFC or ADGM courts to direct distribution instead.