FTA updates family foundation tax guidance for 2026

The Federal Tax Authority has issued an updated version of the Corporate Tax Guide on the Taxation of Family Foundations for 2026, replacing the prior edition released in May 2025. Whilst the overarching legislative framework remains unchanged, the 2026 Guidance introduces clarifications and refinements regarding the application of the UAE Corporate Tax regime to Family Foundations and related structures. In particular, the updated Guidance addresses several areas that were not expressly covered in the previous edition, thereby reducing interpretative uncertainty and delineating the intended scope of the regime more clearly. This Alert summarises the key developments and their practical implications. The 2026 Guidance introduces a refinement to the definition of a trust, which, whilst not altering the substantive tax treatment, provides greater legal precision and alignment with established trust law principles. The amendment removes the reference to assets being transferred to the trust itself and instead emphasises that legal ownership of the trust assets rests with the trustee and such assets are held upon trust for the benefit of the beneficiaries. The update does not give rise to any change in the Corporate Tax treatment of trusts under the UAE regime. The definition of a Family Foundation extends beyond formal foundations and trusts to include similar entities, provided that they are used for the administration of family wealth and they are not commercial companies. The 2026 Guidance introduces important clarifications concerning the treatment of juridical persons, including limited liability companies, held within Family Foundation structures. An LLC is explicitly excluded from this concept and is not considered a similar entity. That said, an LLC may still be treated as a juridical person within a Family Foundation structure and may qualify for fiscal transparency under separate rules.