We are an experienced team and we’ll guide you through how a move can reshape who pays what when someone dies. From 6 April 2025 the rules moved to a residence-based test for inheritance tax. That can bring foreign assets into scope if you have been a long-term resident.
We keep this simple. Early review matters. The change means your years of UK residence — and a possible IHT “tail” after you leave — can pull worldwide estate into tax reach. That affects family protection and long-term choices.
What we will cover: why UK assets are treated differently, how non -uk assets may be swept in by residence history, and the usual tools people use — wills, trusts, lifetime gifts and spouse planning.
Key Takeaways
- April 2025 reforms use residence history to decide IHT scope.
- Long-term UK residence can bring worldwide assets into tax scope.
- There can be a 3–10 year IHT “tail” after leaving the UK.
- Wills, trusts and gifts remain central tools for family protection.
- Cross-border rules matter — get joined-up advice early.
UK inheritance tax for internationally mobile individuals: what changed from April 2025
A major change in April 2025 means residence history now decides IHT reach over worldwide wealth. This replaced the older test that relied mainly on domicile status and situs of assets.
Before 6 April 2025, many individuals faced IHT only on UK-situs assets unless they were deemed domiciled after long residence. From 6 April 2025 the long-term resident test applies once someone is UK tax resident for 10 of the previous 20 tax years.
Who is now subject IHT on worldwide assets — and why it matters
Being subject IHT no longer depends on old domicile labels alone. If you become a long-term resident, worldwide assets can fall within scope.
Key dates that drive decisions
- 30 October 2024 — important cutoff for certain trust protections and elections.
- 6 April 2025 — the new long-term resident rules take effect and change the IHT position.
- April 2027 — pensions and death benefits are expected to be aggregated with the estate for IHT.
In practice, treat your early years here as a window to organise ownership and documents. We focus on protecting family wealth and reducing surprises when tax rules change.
How to work out your exposure using tax years and the Statutory Residence Test
We start by turning dates into tax years. The UK counts residence in tax year blocks. That can change the picture compared with calendar dates or your travel diary.
Understanding the 10 out of 20 test
From 6 April 2025 you are a long‑term resident if you are UK tax resident in at least 10 of the last 20 tax years. Count the tax years immediately before the year of the chargeable event.
Tip: a tax year runs from 6 April to 5 April. Mark those boundaries when you log residence.
Special rule for under‑20s
Individuals under 20 need only be tax resident in at least 50% of the tax years since birth. That can make children very likely to meet the test after repeated family moves.
Split years and mid‑year moves
Where a split year applies, that tax year may still count as a full year for the long‑term test. So arriving in November or leaving in July can count differently than you expect.
Treaty residence does not stop the count
Being treaty resident elsewhere may affect some taxes. It does not prevent the UK treating you as tax resident when counting years for long‑term resident status.
- Practical steps: keep a clear residence timeline, save travel and employment records, and check which tax years count.
- Small errors in counting years can change whether worldwide assets fall within UK IHT reach.
estate planning for non uk domiciliaries moving to uk: building your strategy before you become long-term resident
Begin with a clear map of your holdings so you can spot what may fall into UK IHT reach.
We’ll help you identify which assets are UK situs and which sit overseas. Note income and gains each asset produces. This makes weak spots obvious.
Mapping assets, income and gains
List property, bank accounts, investments and business interests. Mark where each is located and who controls it.
Pay attention to accounts that pay regular income or generate capital gains. Those flows affect tax and administration.
What to protect first
Value matters. So do control and liquidity. High-value business stakes and concentrated portfolios often top the list.
Consider family access too. The need for quick funds at death is a practical risk we take seriously.
Documents and cross‑border roles
Co‑ordinated wills in relevant jurisdictions stop conflict. Choose executors who can act across borders.
Put powers of attorney in place early. They let trusted people act if you are unable to do so.
Simple timeline: when to act
- Pre-arrival — map assets, get wills drafted and record income/gains.
- Year one — check ownership, consider restructuring high-risk holdings.
- Before long‑term status — review documents and update executors and powers of attorney.
Quick checklist
- Map UK vs foreign assets and note income/gains.
- Prioritise high-value and illiquid holdings.
- Coordinate wills and appoint cross-border executors.
- Put powers of attorney in place before you arrive.
| Action | When | Why it matters |
|---|---|---|
| Asset mapping | Pre-arrival | Shows what may fall within UK IHT and highlights income/gains |
| Wills and executors | Pre-arrival / Year one | Reduces conflict and speeds probate across jurisdictions |
| Powers of attorney | Pre-arrival | Allows trusted agents to manage affairs if needed |
| Review ownership | Before long‑term resident status | May limit unintended exposure and protect family control |
If you want practical, tailored advice, start early. See our guide on cross-border planning for expats for next steps.
Worldwide assets, UK assets and excluded property: what sits outside the scope of IHT
The rules that once protected certain overseas holdings have tightened, so excluded status needs fresh scrutiny.
Excluded property now means assets that sit outside scope IHT because you are not a long‑term resident. From April 2025 that label can change as your years of residence add up.
When non-UK situs assets remain outside scope
Non-UK situs assets often stay outside scope iht while you are not a long‑term resident. If you become a long‑term resident, protection can end.
Financial products that changed
Authorised unit trusts and OEICs lost some protective treatment. FOTRA securities still follow tax residence in many cases.
Premium Bonds and National Savings Certificates that were once excluded for Channel Islands and Isle of Man links are no longer excluded after April 2025.
UK residential property and indirect interests
UK residential property remains a common pitfall. Indirect interests through foreign companies or trusts can bring value inside IHT.
- Check where each asset is situated and how it is held.
- Review wrappers and nominee arrangements.
- Decide early if ownership should change before you build UK residence years.
| Asset | Typical treatment pre-April 2025 | Treatment after April 2025 |
|---|---|---|
| Non-UK situs property | Usually excluded | Excluded if not long‑term resident; may become in scope if you qualify as long‑term resident |
| Authorised unit trusts / OEICs | Often excluded for certain individuals | Protection reduced; check individual residence |
| Premium Bonds / NSCs | Excluded for some Channel Islands/Isle of Man links | No longer excluded regardless of LTR status |
| UK residential property (direct/indirect) | In scope if UK situs | Still a hotspot; indirect interests can be pulled into IHT |
For a clear read on where your holdings sit, see our note on UK situs assets. Excluded property can switch on and off; keep it under review before and after April 2025.
Trusts and excluded property trusts: protecting foreign assets without losing flexibility
A well‑drafted trust can protect overseas holdings and make succession easier for your heirs.
When a trust helps: trusts give control over how assets pass, reduce cross‑border probate delays and let you set clear rules for beneficiaries. They suit families who need both protection and access.
How changes in taxation interact with iht from April 2025
From April 2025 trust tax rules and the residence test interact more closely. That means income, gains and inheritance rules can all affect whether assets fall within UK iht scope.
Why 30 October 2024 matters
Trusts created by a non‑UK domiciled settlor before 30 October 2024 can, in certain cases, keep excluded property‑style treatment for non‑UK situs assets. Conditions must be met precisely to preserve that protection.
Risks: settlor‑interested trusts and gift with reservation
If the settlor continues to benefit, assets can be pulled back into the estate. A gift with reservation of benefit or a settlor‑interested arrangement can therefore defeat the original purpose.
Periodic and exit charges
The relevant property regime brings 10‑year periodic charges and possible exit or departure charges. These are often discussed around a 6% effective rate. Plan for liquidity; headline rates hide cashflow impacts.
- Design simply: pick trustees who understand cross‑border duties.
- Keep records: clear minutes and accounts ease future administration.
- Review early: get advice before key dates to preserve protection.
Lifetime gifts, spousal planning and the residence tail: reducing inheritance tax risk over time
When you pass assets on in life, the date you give and your residence history both matter for tax.
Seven‑year rule: a lifetime gift usually falls outside inheritance tax if the donor survives seven years. From 6 April 2025, a gift made while you were not a long‑term resident can stay outside IHT even if you later become one.
Gifts with reservation: if you give something away but keep using it, that amount can be pulled back into the estate and charged at 40% on death. Avoid retaining control or private use if your aim is genuine removal of value.
Spouse and civil partner transfers
Transfers between spouses or civil partners remain largely exempt. After April 2025 a spouse can elect to be treated as long‑term resident. That election can extend exposure until they have 10 consecutive non‑UK resident tax years.
The long‑term resident tail
Leave the UK and an LTR can stay in scope for 3–10 years. That depends on how many years you were resident. Simple rule: more years in, more years out.
Practical next steps: agree what you will gift, avoid ongoing benefit, and check spouse elections against your family’s future residence plans.
Cross-border complications: double tax treaties, succession rules and keeping your plan enforceable
When more than one country claims rights over the same wealth, families can face both tax and legal friction. We explain how treaties and local law can change outcomes, and what that means for your documents.
How international conventions affect liability
The UK has ten IHT double tax conventions that can reduce double charging. HMRC guidance says that where a treaty uses domicile language, a long‑term resident may be treated as domiciled for treaty purposes. That can change your tax and inheritance position.
When elections do not help
Important: spousal or long‑term residence elections are ignored when applying treaties. A step taken to change UK treatment may not alter a foreign treaty analysis. That mismatch can complicate cross‑border resolution.
Forced heirship and multiple wills
Local rules often govern foreign property and can override a UK will in some circumstances. In jurisdictions with forced heirship, heirs may have fixed shares. Using separate wills for local property can limit conflict and speed administration across borders.
Practical steps: keep beneficiary wording consistent, add clear revocation clauses and get joined‑up advice early. For an in‑depth guide on handling tax and residence issues, see our note on navigating inheritance tax as a non-resident.
Conclusion
After April 2025, your pattern of UK tax years will decide whether worldwide assets fall into UK IHT scope.
Start by mapping your residence timeline and tax years. Then list each asset by situs and control. That gives you clear choices on trusts, gifts and wills.
Key watch-outs: split years can count in full, treaty residence does not stop UK year counting, and UK residential property and indirect holdings often trigger charges.
Some protections hinge on dates and status — note the 30 October 2024 cut‑off and the upcoming April 2027 change for pensions and death benefits.
Next step: get a structured review of your position now. For detailed guidance see our non-domicile inheritance tax guide.
, We will help you protect family wealth with clear action before choices become costly.