UAE Announces Tax Relief Measures for Family Foundations and Partnerships

In a recent development aimed at supporting private wealth structures and simplifying compliance, the UAE Ministry of Finance has introduced new tax relief provisions.  

These updates include changes for unincorporated partnerships and family foundations, marking a more flexible and business-friendly approach to taxation in the Emirates. 

• Previously, unincorporated partnerships in the UAE could face ambiguity regarding tax registration and reporting.  
• Under the new guidance, certain partnerships will now be considered transparent for tax purposes.  
• This means the income is taxed at the partner level rather than the entity level—making compliance simpler and aligning with international norms. 

• Family foundations that meet specific criteria can now elect to be treated as tax transparent.  
• This allows the foundation to be excluded from corporate tax, with underlying individuals or beneficiaries responsible for tax on their share of the income. 

These changes are in line with the UAE’s ongoing effort to modernise its tax system without discouraging investment or adding unnecessary administrative burdens. 

• Succession Planning: Foundations often form a core part of estate planning. Tax transparency means fewer layers of tax and more direct control. 
• Asset Protection: Structuring assets within tax-transparent foundations helps maintain privacy while complying with legal frameworks. 
• Simplified Reporting: Families benefit from clearer reporting obligations and reduced risk of double taxation. 

• Ensure your clients' foundations meet eligibility requirements for the new transparent status. 
• Update tax and legal documentation to reflect the election. 
• Review cross-border implications if beneficiaries or assets are located outside the UAE. 

This development confirms the UAE's commitment to being a competitive, compliant, and family-friendly wealth jurisdiction.  

Families and their advisers should review existing structures to take full advantage of the updated regime. 

If you’re working with or part of a family office or private wealth structure in the UAE, we can help you understand the implications of these updates. Our team specialises in international tax and succession planning.