On 19 September 2025, the FTA issued Public Clarification No. CTP008 addressing the corporate tax treatment of family wealth management structures.
This clarification confirms that a foundation may hold an operating entity (such as a Single Family Office or Multi-Family Office) and still benefit from tax transparent treatment, a question that has long been debated. This provides greater certainty and much-needed flexibility for family wealth and succession planning in the UAE.
The FTA also clarified that LLCs are excluded from the definition of a “Similar Entity” to a trust or foundation. Accordingly, LLCs may only obtain the family foundation status where they are wholly owned by a family foundation and meet the requirements of Article 17 of the UAE Corporate Tax Law.
Recap of key principles for family wealth structures under UAE Corporate Tax:
- Entities without separate legal personality (e.g., unincorporated trusts) are automatically tax transparent.
- Foundations may apply for tax transparent status with the FTA if specific conditions are met.
- Free zone foundations that are not family foundations may still benefit from the 0% rate on qualifying income (subject to QFZP rules).
- Holding vehicles / SPVs wholly owned by a tax-transparent family foundation may themselves apply for transparency, even across multiple layers.
- Family members are not subject to corporate tax on personal investment or real estate income.
This development is a win for family offices and private clients in the UAE, solidifying the jurisdiction’s position as a leading hub for wealth management and succession planning.
How can Al Tamimi help?
For more information feel free to reach out to the key contacts.
Key Contacts
Richard Catling, Partner, r.catling@tamimi.com
Midya Omar, Senior Tax Advisor, m.omar @tamimi.com