UAE Law and Practice Contributed by: Yann Mrazek, Kath Zagatti, Hermione Harrison and Keerthi Voodimudi, M/HQ Corporate Services Ltd
For non-Muslim couples, matrimonial property arrangements may be governed by a marriage con- tract or prenuptial/postnuptial agreement. In the absence of such agreement, the applicable law may depend on the law of the place of marriage or the law chosen by the parties, including under Federal Decree-Law No 41 of 2022 on Civil Personal Status, as amended, or relevant DIFC or ADGM frameworks. At death, marital property does not automatically vest in the surviving spouse by virtue of marriage alone. Instead, inheritance rights arise under the applicable succession regime. For Muslims, the surviving spouse receives a prescribed share under Sharia-based inher- itance rules. For non-Muslims, rights depend on a valid will or the applicable default law in cases of intestacy. The UAE does not impose formal “clawback” rules aimed specifically at reversing lifetime transfers that reduce an estate prior to death. Once validly trans- ferred, assets generally fall outside the estate. How- ever, transfers may be challenged under general legal principles where fraud, sham arrangements or creditor prejudice can be established. In practice, succession planning in the UAE relies primarily on ownership structuring and testamentary arrangements rather than on automatic matrimonial property protections. 4.2 Prenuptial and Postnuptial Agreements Pre- and post-marital agreements are permitted in the UAE, but enforceability depends on the govern- ing legal framework and compliance with mandatory principles. For Muslim couples, marriage contracts may regulate certain marital rights and financial arrangements, pro- vided they comply with Sharia principles and do not contravene public policy. The agreed mahr (dowry) forms part of the contractual framework and may become payable upon divorce or death. However, marital agreements cannot override mandatory inher- itance rules, which are protected as part of UAE public order under Sharia-based succession law. For non-Muslim couples, the position is more flexible. Under Federal Decree-Law No 41 of 2022 on Civil
Personal Status, as amended, spouses may regulate financial arrangements through marital agreements. Foreign prenuptial or postnuptial agreements may also be recognised, provided they are valid under the law of execution, properly legalised, and not contrary to UAE public policy. From a succession planning perspective, marital agreements can clarify ownership and reduce dis- putes, but they do not displace mandatory inherit- ance rules where these apply. Their effectiveness therefore depends on alignment with the applicable personal status regime and broader succession plan- ning arrangements. 5. Tax Treatment of Lifetime Transfers and Testamentary Dispositions 5.1 Lifetime Transfers In the UAE, lifetime transfers of property (eg, gifts) are generally tax-neutral, as the UAE does not impose personal income tax or gift, estate or inheritance tax- es. Natural Persons From a UAE CT perspective, lifetime transfers of prop- erty made by individuals are outside the scope of CT, because a natural person is brought within CT only where they conduct a business or business activity in the UAE, and CT applies only to income attributable to that business or business activity. Juridical Persons (Companies/Holding Vehicles) Where the property is held through a UAE entity, a lifetime transfer may have UAE CT implications at the entity level, where it constitutes a disposal or transfer of an asset or otherwise impacts the entity’s taxable income. The comparative tax outcomes of lifetime transfers can be affected by UAE-specific reliefs or exemptions applicable on intra-group transfers. Real Estate Transfer Charges While the UAE does not impose gift or inheritance taxes, transfers of UAE-situs real estate are subject to registration fees payable to the relevant Emirate land department. Standard transfer fees typically range up to approximately 5% of the property mar-
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