The UAE Federal Tax Authority (FTA) has published a new guide, CTGFF1 Taxation of Family Foundations. The document provides detailed clarification on the application of Corporate Tax to family foundations, trusts, and similar structures. This includes both UAE-resident and foreign foundations that have a connection to the UAE.
A Family Foundation is not a specific legal form but a tax concept that encompasses foundations, trusts, and similar structures that meet the conditions of Article 17(1) of Federal Decree-Law No. 47 of 2022.
Such structures are typically created for:
- managing personal or family wealth,
- asset protection,
- ensuring succession planning,
- charitable purposes.
A family foundation may be considered an Unincorporated Partnership for Corporation Tax purposes. If the foundation is considered transparent:
- It does not pay Corporate Tax itself;
- Tax is levied at the beneficiary level, depending on their status:
- Natural persons: Exempt if the income qualifies as Personal Investment or Real Estate Investme...