Last Updated: October 1, 2026
Repatriating an inheritance from the UAE: tax, exchange control and the bank’s paperwork
Moving an inheritance out of the UAE passes through two gates: the UAE bank’s conditions for releasing the deceased’s funds, and the receiving country’s exchange-control and tax rules. For India, an inheritance received from abroad is a permitted receipt with no Indian tax on the amount itself. The paperwork at each end, not the law, decides the speed.
Law stated as at September 2026. Scope: the release of estate funds by UAE mainland banks, and the receiving side written for India, with a paragraph on other destinations. Federal Decree-Law 25/2025 entered into force on 1 June 2026.
Two gates, not one
Families who have finished the UAE court process often expect the money to follow within days. It usually does not, and the reason is rarely the law. Two institutions have to be satisfied in sequence: the UAE bank that holds the deceased’s funds, which releases them only against the court’s instrument and its own compliance checks, and the bank in the heir’s home country, which receives a foreign inward remittance and has its own questions about source, purpose and tax. Each bank is doing what its regulator requires. Neither is interested in the other’s requirements, and the family sits between them.
Gate one: what the UAE bank releases against
What it acts on. The bank releases the deceased’s balance against the court’s inheritance instrument, presented with the identification of every heir and, where the bank requires it, a letter from the court addressed to the bank. For a joint account, only the deceased’s share is in question (Article 379(4) of FDL 50/2022). See The joint account myth and Frozen bank accounts after a death.
To whom. Banks differ. Some pay each heir their share directly; some pay into an estate account; some require a distribution letter signed by all heirs or their attorneys. Where the court has appointed an executor, the executor’s authority under Articles 1118 to 1141 of FDL 25/2025 governs who instructs the bank. The estate’s charges come before distribution, and no heir may collect an estate asset before the certificate of their net share (Article 1126).
The compliance questions to expect. A UAE bank paying out an estate treats it as higher risk: a payment to a person who was not its customer, often abroad, from an account whose holder cannot confirm anything. Expect it to ask for: the relationship between each payee and the deceased; ownership of the receiving account (must be in the heir’s own name); the purpose of the transfer; and, for larger sums, the source of the deceased’s funds. Payments to companies, trusts or nominees will be refused or escalated. Where any heir is a minor, expect the bank to require guardian’s authority and court authorisation under Article 153.
Why is the UAE bank asking for more documents?
Because the document it needs is not the one the family sent. The most common mismatches: an instrument that identifies heirs but not their shares; a court letter addressed to the wrong bank or branch; a death certificate without the licensed Arabic translation; identification documents that have expired since the court application; and a receiving account whose ownership the heir cannot evidence. Ask the bank, at the outset, for its written list of requirements, and match the documents to the list before submitting anything.
Gate two: the receiving side, with India as the worked example
Is the remittance allowed?
A person resident in India may hold, own, transfer or invest in foreign currency, foreign security or immovable property outside India if it was acquired, held or owned when the person was resident outside India, or was inherited from a person who was resident outside India. The heir may receive the inheritance into India, or in principle retain it abroad, subject to reporting and holding rules.
The USD 1 million rule is about money leaving India, not money coming in. The rule that NRIs may remit up to USD 1 million per financial year from their Non-Resident Ordinary accounts (under the Foreign Exchange Management (Remittance of Assets) Regulations 2016 and the RBI’s Master Direction on Remittance of Assets) concerns money leaving India from Indian assets. It is not the mechanism for an inheritance coming into India from the UAE, and it does not cap it.
Which account does the money go into?
For a resident heir, the remittance is received into the heir’s ordinary resident rupee account, converted at the receiving bank’s rate on the day. For a non-resident Indian, the inheritance is foreign-sourced and may be kept abroad; if brought into India, it may be credited to the NRI’s Non-Resident External (NRE) account, which is freely repatriable, rather than to a Non-Resident Ordinary (NRO) account, which is not. Money that has gone into an NRO account can only leave India again within the USD 1 million route. The correct account depends on the heir’s residential status under FEMA on the day of receipt.
Will I pay Indian tax on the inheritance?
India abolished estate duty in 1985 and has no inheritance tax. Money or property received under a will or by way of inheritance is expressly excluded from the provision taxing receipts without consideration, carried into the Income-tax Act 2025.
Three qualifications: income later earned on inherited money is taxable in the heir’s hands in the ordinary way. A resident and ordinarily resident heir must disclose foreign assets in their return’s foreign asset schedule. And TCS under the Liberalised Remittance Scheme applies only to remittances going out of India; it is not collected on an inheritance coming in.
Other destinations
The pattern is the same everywhere: the receiving bank applies its own country’s exchange-control and anti-money-laundering rules, and the receiving country’s tax law decides whether the inheritance is taxed. The two documents that answer most questions anywhere are the legalised UAE court instrument and the remitting bank’s advice identifying the payment as an estate distribution.
Comparison: the UAE releasing bank and the Indian receiving bank
| Question | UAE releasing bank | Indian receiving bank |
|---|---|---|
| What it acts on | The court’s inheritance instrument, heirs’ identification, any court letter, executor’s instructions where appointed | The inward remittance under its purpose code, the heir’s residential status under FEMA, documents evidencing the source as an estate distribution |
| Documents requested | Instrument with Arabic translation; death certificate; identification of every heir; evidence of receiving account ownership; distribution letter; guardian’s authority for a minor | Legalised UAE instrument with English translation; death certificate; proof of relationship; remitter bank’s advice; heir’s identification and residential status |
| Common delay cause | Documents not matching the bank’s list: instrument without shares, court letter to wrong branch, expired ID, unevidenced receiving account | Receipt credited to wrong account class; missing legalisation or translation; remitter’s advice not identifying the payment as an inheritance |
Sequencing both ends so neither bank stalls
The order that works
- Before the UAE court application is complete, ask each UAE bank for its written requirements for estate releases, and ask the heir’s home bank what it will need to receive an inheritance from abroad.
- When the court instrument issues, obtain the number of certified copies both sides need, and have the licensed Arabic translation and the legalisation for use abroad done at the same time rather than in sequence.
- Open or confirm the receiving accounts in each heir’s own name and, for an NRI heir, in the right class of account, before the UAE bank is asked to pay.
- Submit the complete set to the UAE bank once, matched to its list, with the receiving account details and a distribution letter if the bank uses one.
- Give the home bank notice of the incoming remittance, with the documents, before it arrives, so the credit is not held for enquiry.
- Keep every document: the instrument, translations, remitter’s advice, inward remittance certificate. They will be asked for again.
Frequently asked questions
Will I pay tax in India on money inherited from the UAE?
No tax on the inheritance itself. India has no inheritance tax, and money received by inheritance is excluded from the provision taxing receipts without consideration under the Income-tax Act 2025. Income later earned on the money is taxable, and a resident and ordinarily resident heir must report foreign assets.
Is there a limit on transferring an inheritance from the UAE to India?
No FEMA limit applies to an inheritance received from a person resident outside India. The USD 1 million per financial year limit concerns remittances out of India from an NRI’s Indian assets, not money coming in.
Why is the UAE bank asking for more documents after the court order?
Because it releases estate funds only against its own written list. Ask for the list first and submit the documents once, matched to it.
Which Indian account should an inheritance from the UAE be paid into?
For a resident heir, their ordinary resident rupee account. For a non-resident Indian, the money is foreign-sourced and may be credited to a Non-Resident External (NRE) account, which is freely repatriable. Crediting it to an NRO account brings any later transfer out within the USD 1 million route. The right account depends on the heir’s residential status under FEMA on the day of receipt.
A note on getting help. If your family’s UAE estate is at the stage of releasing and remitting funds, we can obtain each bank’s requirements, prepare the instrument, translations and legalisation for both ends, coordinate the instructions to the UAE bank, and, with Indian tax and exchange-control advisers where needed, sequence the receipt in India.
Write to us through the consultation form or at [email protected], with the banks involved, where each heir lives, and the stage the court process has reached.
This article is general information about UAE and Indian law as at the date stated. It is not legal or tax advice, and how the law applies depends on the facts of each estate and each heir’s residential status.
Abid Millath, Managing Partner, Millath and Associates
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