The Federal Tax Authority (FTA) has released an updated version of its Corporate Tax Guide on Family Foundations (June 2026), providing further clarity on how the Family Foundation regime applies to complex ownership structures.
While the fundamental tax treatment remains unchanged, the updated guidance addresses practical issues that have arisen since the introduction of Corporate Tax, particularly for family groups operating through multiple foundations, holding companies, SPVs and family office structures.
A key theme emerging from the update is the FTA’s focus on preserving transparency through an uninterrupted ownership chain across multi-entity family structures.
What’s new?
- Greater Flexibility for Multi-Foundation Structures
The updated guide confirms that a holding company or SPV may be jointly owned by multiple Family Foundations without losing transparent status, provided all owners are themselves treated as transparent entities under the Family Foundation regime.
This clarification provides greater flexibility for larger family groups that operate through separate foundations representing different family branches while investing through shared holding vehicles.
- Clarification on Mixed Ownership Structures
The guide confirms that transparency may be lost where ownership is shared with a person or entity outside the transparent ownership chain. This may require existing ownership arrangements to be revisited or restructured.
For example, direct ownership by an individual family member alongside a Family Foundation may result in the entity failing the ownership conditions and being treated as a separate Taxable Person.
- Family Offices Remain Taxable
The guide now specifically addresses Single Family Offices (SFOs) and Multi-Family Offices (MFOs), confirming that family offices generally undertake active management and service activities and are therefore unlikely to qualify for transparent treatment.
Accordingly, family offices will generally remain Taxable Persons even when owned by a Family Foundation.
- New Guidance on Transfers and Restructurings
The updated guide introduces several important clarifications on transfers into Family Foundations and ownership changes involving entities within Family Foundation structures, including:- Transfers of assets or funds by founders, settlors or other Related Parties to a Family Foundation must comply with the arm’s length principle;
- When a Taxable Person becomes wholly owned by a Family Foundation and is treated as an Unincorporated Partnership, the tax base cost of its assets remains unchanged;
- The transition into or out of a Family Foundation structure does not, by itself, trigger a revaluation of assets for Corporate Tax purposes; and
- Transfers by individuals of Personal Investments and Personal Real Estate Investments generally remain outside the scope of UAE Corporate Tax.
These clarifications provide greater certainty for family restructurings, succession planning and asset transfers.
Practical Considerations for Family Structures:
- Shared Holding Structures Are More Feasible
The new guidance provides greater flexibility for family groups wishing to consolidate investments through shared holding companies or SPVs.
This is particularly relevant for large families that operate through multiple foundations representing different family branches.
- Transparency Requires an Uninterrupted Ownership Chain
Transparency can extend through multiple tiers of holding companies and SPVs, provided each entity independently satisfies the relevant conditions.
A single non-qualifying entity within the structure may interrupt the chain and result in downstream entities becoming subject to Corporate Tax in their own right.
Family groups should review ownership chains carefully and identify any mixed-ownership arrangements that could interrupt transparency and result in an entity becoming a separate Taxable Person.
- Separate Investment and Operating Activities
The guide reinforces the distinction between passive investment-holding entities, which may qualify for transparency, and active businesses such as family offices, management companies and operating entities, which generally remain taxable.
Families should ensure that management and service activities are appropriately ring-fenced from investment-holding structures.
- Greater Certainty for Restructuring and Succession Planning
Families considering asset transfers, succession planning initiatives or ownership reorganizations should revisit these transactions in light of the new guidance.
Particular attention should be given to arm’s length requirements for related-party transfers and the ongoing satisfaction of Family Foundation conditions following any restructuring.
- Monitor Ongoing Compliance
Transparency status is not a one-time assessment. Family groups should regularly monitor compliance across all entities within the structure to ensure that the relevant conditions continue to be met.
While the updated guide does not change the fundamental policy underlying the Family Foundation regime, it provides valuable clarity for families operating through increasingly sophisticated multi-entity structures and undertaking succession planning or restructuring initiatives.
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M/HQ is a multi-services platform catering to successful individuals and entrepreneurial families. Our one-stop-shop offering is unique in the Middle East: a holistic and cross-disciplinary combination of a market-leading corporate services firm, a private client specialist team and a regulatory & compliance services practice, all through one single platform.
We assist in establishing and service regulated financial institutions on one hand – and multi-/single- family offices, sophisticated investment structures, group-/family- holdings, foundations on the other hand.
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