Introduction
As a British expat living in Dubai, the complexities of managing your estate might seem daunting and, particularly when it comes to ensuring that your assets, whether in the UK or overseas, are protected and passed on according to your wishes. One of the key questions that arise is: Should I have a UK will in place, even if I’m residing in the Dubai?
The answer is, quite simply, yes—but the reasoning behind it is a bit more nuanced.
Why Having a UK Will is Crucial
As a British expat, the majority of your assets may still be tied to the UK. This could include properties, bank accounts, pensions, or even investments. While you may live in Dubai, your estate in the UK will still be subject to British laws of inheritance and taxation.
If you die without a valid UK will (known as dying intestate), UK law will decide how your assets are distributed. This could mean that your wishes are not respected, and your loved ones might not receive what you intended. A UK will ensure that your estate is distributed in accordance with your directives, giving you peace of mind.
Potential Conflicts of Law
One of the significant challenges for expats is the potential clash between UK law and Dubai’s legal system. In Dubai, Sharia law can govern the distribution of assets, which might not align with your intentions, particularly regarding how assets are divided among family members. This is particularly important if you have a family in Dubai, as local laws could potentially override your wishes if you haven’t adequately planned.
However, under a new law passed in Dubai in 2020, expats are allowed to register their wills under the Dubai International Financial Centre (DIFC) Wills and Probate Registry. This law enables non-Muslim expats to ensure their estates are distributed according to their will rather than under Sharia law.
Yet, for your UK-based assets, having a UK will is essential to ensure seamless management of your estate across jurisdictions.
Avoiding Inheritance Tax Complications
Another reason to have a UK will is the matter of inheritance tax (IHT). As a British expat, you may still be considered a UK domicile for tax purposes, meaning your estate could be subject to UK inheritance tax regardless of your residency. The current IHT rate is 40% on estates valued above £325,000, which can significantly reduce the value passed on to your beneficiaries.
A well-drafted UK will can be part of a broader estate planning strategy to help mitigate your IHT liabilities. You could, for instance, include trusts or other financial arrangements to ensure that your estate is managed efficiently, reducing the overall tax burden on your loved ones.
The Double Will Strategy
Many British expats in Dubai choose to have two wills—one governing their UK assets and another governing their assets in the UAE. This strategy can simplify the probate process and reduce the likelihood of complications between different legal systems. However, it’s essential to ensure that the two wills don’t contradict each other.
Having two wills drafted to work in tandem ensures that each jurisdiction handles the respective portion of your estate efficiently, reducing delays and potential legal disputes. Working with an experienced lawyer familiar with both UK and UAE law is crucial for drafting these documents.
Conclusion
For British expats living in Dubai, having a UK will is not only advisable but essential. It protects your UK assets from falling into the hands of unintended beneficiaries, ensures that your estate is distributed according to your wishes, and helps navigate the complex waters of inheritance tax. Pairing a UK will with a Dubai-specific will ensures clarity across borders and safeguards your estate in both jurisdictions.
Ultimately, taking the time to plan your estate carefully, with legal assistance, can provide invaluable peace of mind, ensuring that your loved ones are taken care of and your legacy is protected.
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