Financial Planning in the Palestinian Territories: A Guide for Expats and International Investors
The Palestinian Territories — comprising the West Bank (under Palestinian Authority administration) and the Gaza Strip (under Hamas governance since 2007, with catastrophic destruction from the 2023–2025 conflict) — do not constitute a fully sovereign state as recognised by all UN members, but represent a territory where significant numbers of people live and work, where internationally mobile individuals (development workers, diaspora, investors) have financial connections, and where the large Palestinian diaspora in the UK and worldwide faces specific financial planning considerations.
This guide addresses the financial and tax framework primarily in respect of the West Bank, under Palestinian Authority (PA) administration, as Gaza's financial infrastructure has been largely destroyed in the conflict that began in October 2023.
Compliance note: The situation in the Palestinian Territories is subject to rapid and profound change. Nothing in this guide constitutes tax or legal advice. The legal status of transactions, assets, and financial arrangements may be affected by the ongoing conflict and political developments. Seek qualified professional advice at all times. Investments can fall as well as rise. The security situation requires constant monitoring through FCDO travel advisories.
Political and Legal Context
The Palestinian Territories occupy a unique legal position:
- The West Bank is administered by the Palestinian Authority under the Oslo Accords framework, with areas classified as Area A (PA civil and security control), Area B (PA civil, Israeli security), and Area C (Israeli civil and security control — covering approximately 60% of the West Bank)
- Gaza Strip has been under Hamas control since 2007 and has been subject to an Israeli blockade; the 2023–2025 conflict caused catastrophic civilian infrastructure destruction
- The Palestinian Authority exercises limited governance and taxation authority in Area A and B of the West Bank
- Palestinian State status: Palestine has observer state status at the UN (since 2012). The majority of UN member states recognise the State of Palestine. The UK formally recognised the State of Palestine on 21 September 2025. The USA and Israel do not recognise Palestinian statehood
For financial planning purposes, the practical framework is the Palestinian Authority's governance structures in the West Bank.
Tax Residency and Tax Framework
The Palestinian Authority operates a tax system through its Ministry of Finance and the Income and Value Added Tax Department. The tax framework has developed substantially since Oslo, drawing on pre-existing Jordanian law (which applied in the West Bank under Jordanian administration 1948–1967) and Israeli-era military orders, with PA legislation overlaid.
Tax residency for individuals is based on habitual residence in the Palestinian Territories, presence for 183 or more days in a year, or having the centre of economic interests there.
There is no UK-Palestine double tax treaty. UK residents with Palestinian-source income must rely on unilateral relief provisions.
Income Tax
The Palestinian Authority's income tax legislation provides for progressive personal income tax:
- NIS 0–75,000 per year: 5%
- NIS 75,001–150,000: 10%
- NIS 150,001 and above: 15% (top rate)
Note: Figures in New Israeli Shekel (NIS/ILS) — see currency section below.
Employment income is subject to PAYE withholding. Business income is assessed through business profit tax provisions. Various deductions and allowances reduce the effective rate.
For internationally mobile individuals, the relatively low top rate of 15% is notable. However, the practical difficulties of operating in the Palestinian Territories in the current environment substantially offset any tax efficiency advantage.
Capital Gains Tax
Palestinian tax law imposes a real estate transfer tax (Tabo fee) on property transactions, but there is no comprehensive standalone personal capital gains tax on securities.
Real estate gains: Transfer tax and registration fees apply on property sales. Rates should be verified with local legal counsel as they can change.
Inheritance and Estate Tax
There is no formal inheritance tax in the Palestinian Territories comparable to UK IHT. Succession is governed by a combination of:
- Islamic law (for Muslim majority)
- Family courts under applicable religious jurisdiction
- PA civil law provisions
Forced heirship under Islamic succession law (sharia inheritance rules) determines asset distribution in many cases. This is an area where specialist local legal advice is essential.
UK-domiciled individuals holding Palestinian assets remain subject to UK IHT on worldwide estates.
Wealth Taxes
No net wealth tax exists under the PA framework.
Pension Implications
UK State Pension: Frozen for Palestinian Territories residents — no bilateral social security agreement with the UK.
UK Private Pensions: Accessible from abroad in the normal way. Without a DTA, standard UK non-resident rules apply.
Development and humanitarian sector pensions: UNRWA (UN Relief and Works Agency for Palestine Refugees), other UN agencies, and major INGOs operating in the Palestinian Territories typically provide pension coverage through international organisational arrangements outside the Palestinian domestic framework.
Palestinian social security: The PA operates a social insurance system covering formal sector workers, providing retirement, disability, and occupational accident benefits. Coverage is limited relative to OECD standards.
Banking Environment and Currency
The Palestinian Territories do not have their own currency. The New Israeli Shekel (NIS/ILS) is the primary currency in both the West Bank and Gaza, alongside the Jordanian dinar (JOD) which has historical usage in the West Bank. The US dollar also circulates.
Banking in the West Bank:
- Bank of Palestine — the largest Palestinian bank, Ramallah-headquartered
- Arab Bank (Jordan-owned, significant regional presence)
- Housing Bank for Trade and Finance (Jordan)
- BLOM Bank Palestine (Lebanese banking group)
- Cairo Amman Bank
- Palestine Islamic Bank
Israeli banks do not operate directly in the West Bank under current arrangements, but Israeli banking infrastructure underpins many settlement and cross-border transactions.
Correspondent banking has been a persistent issue for Palestinian banks — several major international banks have periodically reduced correspondent relationships citing AML compliance concerns, creating difficulties for international transfers.
The Paris Protocol (1994) established the monetary framework under Oslo, with the NIS as the primary currency and limited PA monetary authority.
The Conflict Economy and Gaza
The October 2023 Hamas attack on Israel and the subsequent Israeli military operations in Gaza caused catastrophic destruction of civilian infrastructure, displacement of the majority of Gaza's 2.2 million population, and a humanitarian crisis of extreme severity. The financial infrastructure of Gaza was essentially destroyed.
For planning purposes:
- Gaza is effectively inaccessible for conventional financial engagement
- Reconstruction, when it occurs, will be a massive international development finance exercise
- Any commercial or investment engagement in Gaza requires specialist legal advice on applicable law, sanctions, and AML/CFT obligations
Key Compliance Issues for Expats and Diaspora
Hamas sanctions: Hamas is a proscribed terrorist organisation under UK law. The UK also maintains targeted financial sanctions in relation to Hamas and designated individuals. Any financial transaction that could benefit Hamas is a criminal offence. This includes remittances that could be redirected, property transactions, or business dealings in Gaza. The humanitarian exception framework (OFSI licences) applies for genuine aid.
Israeli settlement transactions: UK policy does not recognise Israeli settlements in the West Bank as having legal status under international law. Purchasing property in Israeli settlements creates significant legal and reputational risks and may affect the enforceability of title under Palestinian and international law.
AML: Palestinian banks have faced correspondent banking risks related to AML concerns. Ensure all transactions use regulated channels.
UK Bribery Act: The complex governance environment in both the West Bank and Gaza creates corruption risk. UK persons must maintain anti-bribery compliance.
Sanctions screening: Beyond Hamas, check OFSI consolidated list for any designated individuals connected to Palestinian financial transactions.
Palestinian Diaspora in the UK
The UK Palestinian diaspora numbers several hundred thousand, significantly supplemented by recent arrivals given the humanitarian situation. Key financial planning issues:
- UK tax residency planning: New arrivals should take immediate advice on UK tax residency and, for recent arrivers to the UK, the four-year Foreign Income and Gains (FIG) regime that replaced the remittance basis / non-dom regime from 6 April 2025.
- Remittances to Gaza/West Bank families: Use only FCA-registered MSBs and ensure strict AML compliance. The conflict environment creates heightened due diligence obligations.
- UK will and estate planning: Priority for all diaspora families — ensuring UK assets are distributed as intended given the complexity of Islamic succession law and the practical inaccessibility of Palestinian legal processes.
- Palestinian property: Many diaspora families hold interests in West Bank property. These can generate rental income (reportable to HMRC) and are subject to UK CGT on disposal for UK residents. Title verification is complex given decades of conflict and displacement.
How Global Investments Can Help
Global Investments has experience serving clients from the Palestinian diaspora and Middle Eastern communities, approaching these engagements with sensitivity to the extraordinary personal and family circumstances involved. We can assist with:
- UK tax residency planning for recent arrivals
- UK tax residency and Foreign Income and Gains (FIG) regime advice for recent arrivers (working with specialist tax advisers) under the post-April 2025 framework
- Investment portfolio management in GBP, USD, and JOD-connected environments
- Estate planning addressing UK IHT and complex overseas succession dimensions
- Remittance and family financial support planning
- UK property and investment structuring
We approach these conversations with full sensitivity to the geopolitical and personal dimensions. Contact us in confidence to discuss your situation.
This guide is for informational purposes only and does not constitute financial, tax, or legal advice. Rules and rates cited are based on information available as of June 2026 and are subject to change. The situation in the Palestinian Territories is extremely dynamic — seek current professional advice before any action. Investments can fall as well as rise.
This guide is for general information only and does not constitute financial advice or a personal recommendation. The value of investments can fall as well as rise and you may get back less than you invest. Tax rules, pension legislation, and investment regulations change — always verify current rules and seek advice from a qualified independent financial adviser before making any financial decisions.