South African Muslims with Assets Abroad: Islamic Inheritance and Finance Guide

Growing numbers of South African Muslims hold assets outside South Africa — property in the UK or Australia, investments in the UAE, a business interest in Mozambique or Zambia, or an offshore portfolio built up over years of foreign investment allowance transfers. These cross-border assets create complexity that most South African Islamic estate plans do not address. This guide covers the key considerations.

Why Offshore Assets Complicate Islamic Inheritance

When you die as a South African resident, your worldwide assets are subject to South African estate duty. But each country where you hold assets also has its own succession law, which may or may not recognise your South African Islamic will. The result: your estate may end up being administered under multiple legal systems, with the risk that some assets are distributed according to local law rather than faraid.

Each Country’s Law Applies to Assets There

The general principle in international private law is that immovable property (real estate) is governed by the law of the country where it is situated. This means:

• Your UK property is subject to UK succession law — which does not automatically apply faraid
• Your UAE property is subject to UAE law — which may or may not apply Islamic law (depending on the emirate and the nature of the property)
• Your Australian investment property is subject to Australian state law

Movable assets (bank accounts, shares, investments) are generally governed by the law of the deceased’s domicile — in most cases, South African law for South African residents. But this is a complex area and varies by jurisdiction.

The UK

The UK has a significant South African Muslim diaspora and is the most common destination for SA Muslim offshore assets. UK succession law allows full freedom of testation — you can write a will directing your UK assets to be distributed according to Islamic faraid, and a UK court will generally give effect to it. The practical requirement: a UK will (or a clause in your SA will that is valid in the UK) specifically addressing your UK assets. UK inheritance tax (IHT) also applies — at rates and thresholds that differ from South African estate duty (verify current UK IHT thresholds annually).

The UAE

The UAE is one of the most complex jurisdictions for estate planning. UAE Federal Law applies to Muslims’ estates by default, which means faraid applies to your UAE assets automatically — potentially a more favourable outcome than many other jurisdictions. However, the UAE has specific rules around property registration, emirate-level variations, and DIFC (Dubai International Financial Centre) registered assets that can alter this. Specialist UAE legal advice is essential for any SA Muslim with UAE assets.

Australia

Australian succession law provides freedom of testation similar to South Africa, but Australian courts may scrutinise an Islamic will that appears to discriminate based on gender (the difference in shares between sons and daughters). While an Australian court would likely give effect to a properly drafted Islamic will as an expression of the testator’s wishes, this is not guaranteed. Australian legal advice is recommended for SA Muslims with Australian assets.

The South African Estate Duty Dimension

South African estate duty applies to the worldwide assets of South African residents — including offshore assets. You do not escape SA estate duty by holding assets offshore. The foreign asset is included in your dutiable estate, though double taxation relief may be available where the foreign country also levies an inheritance or estate tax. Read our guide on estate duty and Islamic inheritance for the SA estate duty framework.

Exchange Control and Offshore Investment

South African residents are subject to SARB exchange control rules when transferring money offshore. The current annual foreign investment allowance (verify the current limit with a qualified advisor, as it changes) allows individual transfers for investment purposes. Formal emigration and other mechanisms affect these limits. All offshore investments should be declared to SARS. Ensure any offshore investment platform or product is FSCA-compliant and that your offshore holdings are included in your tax returns. Read our guide on Shariah-compliant offshore investing.

Zakah on Offshore Assets

Your offshore assets form part of your zakatable wealth. Foreign bank balances, offshore investments, and offshore property held for investment (not personal use) are subject to zakah in the same way as local assets. Include them in your annual zakah calculation at their rand-equivalent value on your zakah date. Read our guide on zakah calculation in South Africa.

Planning Steps for SA Muslims with Offshore Assets

1. Inventory all offshore assets — property, bank accounts, investments, business interests, retirement accounts in other countries
2. Get legal advice in each relevant jurisdiction — your SA attorney and Islamic estate planner need to coordinate with local counsel in each country where you hold significant assets
3. Consider a multi-jurisdiction will strategy — either a single SA will with jurisdiction-specific clauses, or separate wills for each jurisdiction. Your advisors will recommend the right approach
4. Declare all offshore assets to SARS — ensure your foreign asset disclosures are up to date
5. Include offshore assets in your zakah calculation — at their rand-equivalent value on your zakah date
6. Account for estate duty on worldwide assets — ensure your estate has liquidity (takaful) to cover SA estate duty even on offshore assets
7. Use the calculator — include your offshore assets in our Islamic Inheritance Calculator for a complete estate picture

Get Specialist Cross-Border Islamic Estate Planning Advice

Cross-border Islamic estate planning is one of the most specialised areas of Islamic finance advisory — it requires South African estate law knowledge, Islamic inheritance expertise, and an understanding of the relevant foreign jurisdictions. Our team at MuslimFin coordinates with specialist attorneys in key markets to build integrated Islamic estate plans for South African Muslims with offshore assets. Book a consultation.