We help families who hold US accounts but live in the UK. From April 2025, the IHT rules shift to a long‑term residence test. That change can affect how your family pays inheritance tax on what you leave behind.
We explain, in plain English, how UK inheritance tax and US estate tax can interact. We set out the main traps, the order that matters, and the practical conversations to have with advisers.
Our aim is clear. We show which assets are exposed, what can be structured, and when treaty co‑ordination is essential to limit double taxation. We use real examples so you can map the rules to your family.
We won’t give one‑size‑fits‑all checklists. Instead, we explain the rules, key traps, and the type of specialist advice that makes a plan durable — not just good on paper.
Key Takeaways
- The April 2025 shift to a 10‑in‑20 test changes long‑term residence status and IHT exposure for everyone holding worldwide assets.
- UK inheritance tax and US estate tax can pull in different directions; treaty co‑ordination is essential to avoid paying twice.
- The order of actions — sales, gifts, trust transfers, residency moves — often matters as much as the actions themselves.
- Commonly owned brokerage accounts, pensions and property need careful cross-border review.
- Work with cross‑border accountants and solicitors who understand both systems to make plans robust.
Who this guide is for and why US-UK estates are uniquely complex
We wrote this guide for British nationals holding US shares and funds, dual‑national couples, UK residents inheriting from American parents, and returners who still hold US accounts.
Two different systems sit behind most surprises. The US taxes by citizenship and green card status. The UK uses residence and, from April 2025, a long-term residence counting test. That split causes familiar double taxation and mismatch traps.
Mismatch means the same gain can be treated as different types of income in each country. That can block credits and leave families overcharged — sometimes paying tax in both jurisdictions with no effective relief.
Common friction points
- Transparent US entities (such as LLCs) that look opaque to HMRC, creating classification mismatches that can block foreign tax credits.
- US calendar‑year reporting (January to December) versus the UK tax year (6 April to 5 April).
- Different reliefs for homes and pensions that simply don’t align between the two systems.
Families often feel fine until a single event — a sale, a gift, a trust distribution or a death — triggers a sudden tax bill in one or both countries. Our aim is straightforward.
Ask better questions early. Get advisers on both sides involved for treaty claims, trust and entity reviews, wills aligned to spousal relief, and pre‑arrival restructuring. That saves time and money later. As we always say: plan, don’t panic.
Key UK estate planning fundamentals: estate, wills and Lasting Powers of Attorney
We begin by laying out what legally forms your estate in the UK and why ownership matters when someone dies.
What counts includes property, bank balances, shareholdings and — from April 2027 — potentially unused pension funds. Jointly owned assets held as joint tenants pass straight to the survivor by right of survivorship. Sole-name assets usually form part of the estate that an executor must administer after obtaining a Grant of Probate from the Probate Registry.
Wills and executors
A will names who inherits and who acts as executor. Executors collect assets, pay debts and apply for a Grant of Probate from the Probate Registry when needed.
Probate is typically required for substantial estates. During the probate process — which can take 3 to 12 months, longer when property must be sold — all sole-name assets are frozen. Bank accounts cannot be accessed, property cannot be transferred, and investments sit idle. The will becomes a public document once the Grant is issued, meaning anyone can obtain a copy for a small fee. If no valid will exists, the intestacy rules under UK law apply, which can seriously harm blended families and unmarried partners who have no automatic right to inherit.
Lasting Power of Attorney (LPA)
A Lasting Power of Attorney (LPA) lets someone act on your behalf while you are alive but unable to manage your own affairs. There are two types: a health and welfare LPA, and a property and financial affairs LPA. Both protect day-to-day finances and medical choices if you lose capacity. Without registered LPAs in place, your family would need to apply to the Court of Protection for a deputyship order — a slower, more expensive and more stressful process.
- Cross-border issues: US brokerage firms and foreign institutions often require their own authority documents. A UK LPA alone may not be recognised by a US custodian, so separate powers under US law may also be needed.
- Common oversights: outdated wills after a move between countries, missing beneficiary nominations on pension and insurance policies, and appointing an executor or attorney who has no understanding of cross-border obligations.
Simple steps taken early — up-to-date wills, registered LPAs and clear ownership records — reduce stress and cost for those left behind. Assets held in a properly established lifetime trust can bypass probate delays entirely, giving trustees the ability to act immediately without waiting for a Grant. That speed and continuity is one of the most undervalued benefits of trust-based planning.
UK inheritance tax after April 2025: long-term residence replaces domicile
From 6 April 2025, long‑term resident (LTR) status decides IHT exposure. The old focus on domicile gives way to a counting test based on years of UK tax residence.
The basic test: you are a long‑term resident if you were UK tax resident in at least 10 of the previous 20 UK tax years.
How the 10-out-of-20 years test works in practice
Partial tax years can count depending on the split-year rules. So can short returns. Keep a clear record of each tax year and your residence status within it.
- Count each UK tax year (6 April to 5 April) where you were treated as UK tax resident under the Statutory Residence Test.
- Reach 10 qualifying years within a rolling 20-year window and you become a long‑term resident for IHT — exposed on worldwide assets.
- Stay below 10 qualifying years if your aim is to limit exposure to UK‑situated assets only.
The residence “tail” and why timing matters
Leaving the UK does not end worldwide IHT exposure overnight. Long‑term residents face a residence tail that can run between 3 and 10 additional tax years after departure, depending on how long they were UK resident.
“A move abroad may not stop worldwide inheritance tax overnight — timing can make a big difference. Plan years ahead, not months.”
This tail affects retirement moves, second‑home sales and gift timing. If you plan to leave the UK, map your residence history carefully to understand exactly when the tail ends. A gift made during the tail period is still potentially within scope of IHT — and if that gift is to an individual, the seven-year potentially exempt transfer (PET) clock runs alongside the tail, meaning both timers must expire before the asset is fully outside your estate.
UK-situs assets versus worldwide assets
Non‑long‑term residents are usually subject to IHT only on UK‑situated assets. Long‑term residents are subject on worldwide assets — which means every US brokerage account, overseas property and foreign bank balance can fall within the UK inheritance tax net.
Examples: UK property is always within scope regardless of the owner’s residence status. An overseas brokerage account held by someone who is not an LTR would normally be outside UK IHT — but the moment LTR status is reached, that same account falls inside worldwide coverage. The UK nil-rate band is just £325,000 per person (frozen since 2009 and confirmed frozen until at least April 2031), so even modest worldwide holdings can trigger a 40% charge. For a married couple, the combined nil-rate band is £650,000, potentially rising to £1,000,000 when the residence nil-rate band applies — but that additional allowance is only available if a qualifying home passes to direct descendants.
| Residency status | Typical IHT exposure | Planning focus |
|---|---|---|
| Non‑LTR (under 10 qualifying years) | UK‑situated assets only | Manage UK asset ownership and timing of gifts; consider excluded property structures |
| LTR (10+ qualifying years) | Worldwide assets, including all US holdings | Consider lifetime trusts, gifting strategy and seven-year survival periods |
| Leaving LTR (residence tail active) | 3–10 years of continued worldwide coverage | Map past and future years before moves; plan gifts and trust transfers around the tail |
For a practical walkthrough of the April 2025 change and how residence tests affect IHT, see our detailed guide on UK inheritance tax in 2025.
US estate tax basics that still apply to Brits holding US investments
We summarise the key US federal rules so you can see where tax and paperwork fall. The headline numbers matter because they are dramatically different from UK thresholds — and understanding both systems is the only way to avoid being caught between them.
Headline figures: the US federal estate tax exemption is $13,990,000 per person in 2025 ($27,980,000 for married couples). However, non-US citizens who are not US-domiciled get a much smaller exemption — currently just $60,000 — on US-situs assets such as US stocks, US real estate, and certain US bonds. That low threshold catches many UK residents by surprise.
How the US allowance compares to UK thresholds
The UK nil‑rate band is £325,000 per person, with an additional residence nil-rate band (RNRB) of £175,000 if you leave a qualifying home to direct descendants — giving a maximum of £500,000 per person or £1,000,000 for a married couple. The standard IHT rate above those bands is 40% (reduced to 36% if 10% or more of the net estate is left to charity). That means families can feel safe under the large US federal exemption yet face a binding UK charge on the same assets. The two systems apply different thresholds to different pools of assets, and neither cares what the other has already taxed.
Why ownership and location change outcomes
Where assets sit and how they are held alters both tax and reporting obligations. Personal accounts, joint holdings and corporate or trust structures can be treated differently across the two systems.
- Administrative impact: even if no US estate tax is due, valuation and filing obligations still apply. The IRS requires an estate tax return for non-citizens with US-situs assets above $60,000.
- Ownership surprises: a US LLC may be treated as transparent for US tax purposes but as an opaque company by HMRC, leading to classification mismatches and blocked credits.
- Practical example: a UK long-term resident with a $400,000 US brokerage account and a £290,000 UK home may owe no US federal estate tax (under the treaty, they can claim a proportionate share of the US exemption) yet face UK IHT at 40% on combined worldwide value above the nil-rate band. With combined assets pushing well beyond the £325,000 nil-rate band, the IHT exposure is real and immediate.
Using the US-UK estate tax treaty to reduce double taxation risk
When both tax systems reach into the same pot, the US-UK Estate Tax Treaty (the 1978 treaty, as amended) is the first line of defence.
What the treaty does: it allocates primary taxing rights between the two countries and provides credit mechanisms to prevent being taxed twice on the same assets. It does not eliminate all charges. Instead, it allows tax paid in one country to be offset against liability in the other, subject to specific conditions and timing requirements.
How relief works and why timing matters
Treaty relief applies when both jurisdictions claim an overlapping right to levy death taxes on the same assets. Good records on valuations and dates are critical when making a claim — both HMRC and the IRS require matched figures.
Timing trap: if one country taxes at first death while the other defers tax to a later event (for example, through spousal deferral), the credit can be blocked because there is no corresponding charge in the other jurisdiction at that point. That mismatch can leave families paying more than expected despite the treaty’s intention.
Spousal deferral and QDOTs
UK spousal exemption (which is unlimited between spouses and civil partners for IHT) and the US unlimited marital deduction do not always align for mixed-citizenship couples. In the US, the marital deduction is generally not available if the surviving spouse is not a US citizen. A qualified domestic trust (QDOT) provision in a will can bridge that gap, allowing the US estate tax to be deferred until the surviving non-citizen spouse dies or receives distributions from the trust.
| Issue | Why it matters | Practical step |
|---|---|---|
| Double taxation | Both countries claim tax on same assets | File treaty claim with both HMRC and IRS; keep matched valuation proof |
| Timing difference | Tax charged at different points (first death vs. later event) | Consider QDOT or aligned deferral strategy; model both timelines |
| Spousal deferral | UK spousal exemption is unlimited; US marital deduction may not apply to non-citizen spouse | Draft will and beneficiary nominations to coordinate both systems |
Questions to take to advisers: who survives, what citizenship they hold, where they will be resident when death occurs, and where the assets are situated. For a deeper walkthrough of cross‑border scenarios see our guide on handling overseas assets.
estate planning for brits with us investments uk: residency, tax years and the April 2025 regime shift
Residency status and the way tax years are counted now decide how much of your global wealth falls within the UK inheritance tax net after April 2025.
UK tax residency, the importance of tax years and the 183-day benchmark
How many UK tax years you have been resident matters more than ever. The new long-term residence regime turns a simple year-count into a critical planning hinge that can swing your IHT exposure from UK-only assets to worldwide coverage.
The 183‑day benchmark is one of the automatic tests within the Statutory Residence Test (SRT). If you spend 183 or more days in the UK in a tax year, you are automatically UK tax resident for that year. It is not the only test — there are also automatic overseas tests and sufficient ties tests — but it is the simplest day-count that advisers watch closely.
The four-year special regime for new UK residents and planning opportunities
New UK residents who have not been UK tax resident in the previous 10 tax years can benefit from a four‑year foreign income and gains (FIG) regime after 6 April 2025. During this window, foreign income and gains can be brought to the UK without the usual UK tax charges, subject to conditions.
Use the period to plan cash needs, review holdings that would otherwise trigger UK income tax or capital gains tax on remittance, and carefully sequence sales and transfers. However, this regime does not protect against the long-term residence IHT test — if you continue to live in the UK beyond the four-year window, those years still count towards the 10-out-of-20 threshold.
Onshoring and remitting funds: avoiding unintended UK tax charges
Bringing money to the UK can trigger tax consequences if not timed correctly. Think of remitting as opening a cupboard — do it in the right order to avoid pulling the wrong items into UK tax.
Practical checklist:
- Record your arrival date and first full UK tax year of residence.
- Note your expected length of UK stay and any planned large disposals of US assets.
- Sequence remittances to make use of the four‑year FIG window and any transitional provisions running through to 2028.
Optimising US investment holdings while UK resident
Cross-border holdings can turn a low-cost US index fund into a heavy reporting burden overnight once you become UK tax resident.
We explain the everyday risks so you can choose the right route. Simple funds can create complex tax and reporting outcomes in both jurisdictions. A small mistake — holding the wrong fund wrapper or failing to make an election — costs time and value later.
Collective funds and PFIC risk
Many non‑US ETFs and collective funds fall under PFIC (Passive Foreign Investment Company) rules for US taxpayers. That creates punitive US tax charges and extra filing requirements (Form 8621).
Even plain‑looking index funds domiciled outside the US can be treated as PFICs if you are a US person. Conversely, US-domiciled funds may lack UK reporting fund status, creating problems from the UK side. The challenge for dual-status individuals is finding investments that work cleanly under both systems.
Non‑reporting funds and offshore income and gains
Some US mutual funds lack HMRC reporting fund status. Gains on disposal are then taxed under the offshore income gain rules rather than as capital gains.
This treatment converts what would normally be a capital gain into taxable income at income tax rates — up to 45% — rather than the lower capital gains tax rates. For someone holding a US mutual fund worth several hundred thousand pounds, the difference can be tens of thousands in additional tax.
Aligning CGT and foreign tax credits
- Keep clear cost‑basis records in both sterling and US dollars to match UK CGT calculations to foreign tax credit claims.
- Document dividend classification (ordinary vs qualified) and withholding tax deducted to support credit claims in both jurisdictions.
- Where possible, structure disposals so that UK capital gains tax is paid in a way the US will recognise for credit, and vice versa.
Decide whether to keep taxable holdings in the US, hold individual securities to avoid PFIC and reporting fund issues, or restructure based on your residency horizon and family needs. Good documentation and prompt professional advice protect your long‑term value. For practical next steps see protect your family’s future.
Pensions and retirement accounts across borders
Pensions often work quietly in the background until withdrawals or rule changes force them into the spotlight of cross-border planning.
The treaty can matter significantly. A recognised 401(k) or IRA may retain its tax-deferred status under the UK–US double taxation treaty, provided the scheme qualifies and the right elections and disclosures are made. Confirm scheme status early — before you become UK resident — to avoid an unwelcome income tax charge on arrival.
Drawing benefits and timing
In the US, Required Minimum Distributions (RMDs) start at age 73. That creates a firm date when income must be withdrawn and reported — potentially to both the IRS and HMRC.
UK pensions (including SIPPs) offer more flexibility. Most schemes allow a 25% tax-free lump sum (the pension commencement lump sum) followed by flexible withdrawals taxed as income. The same withdrawal can sit in different tax years across the two systems (US calendar year vs UK tax year running 6 April to 5 April) and attract different rates. Careful coordination of draws can avoid pushing income into higher-rate bands in either country.
Pensions as part of legacy planning
Beneficiary nominations on pension policies are as important as any will. On death, pension funds typically pass outside the estate and bypass probate delays — the scheme administrator pays directly to the nominated beneficiary. However, the proposed change from 6 April 2027 is significant: unused pension funds may be brought within the scope of UK inheritance tax at 40%. That fundamentally changes pensions from an IHT-free legacy vehicle to a potentially taxable one, and it makes reviewing beneficiary nominations and considering how pension wealth fits alongside your wider estate plan more important than ever.
| Feature | US | UK |
|---|---|---|
| Mandatory draw age | RMDs at 73 | No mandatory drawdown age; greater flexibility |
| Tax treatment | Taxed as income on distribution | 25% lump sum often tax-free; remainder taxed as income |
| Post-death risk | Beneficiaries taxed on withdrawals over 10-year period | From April 2027, unused funds may fall within IHT at 40% |
- Practical questions: which pension pot should fund living costs first, when US RMDs must be triggered, and who is nominated as beneficiary on each policy — checking nominations are consistent with your will and any trust arrangements.
- Keep clear records of every pension scheme, its treaty status, and whether HMRC has been notified. Check that UK and US tax filings are consistent in how pension income is reported.
Buying, owning and selling a UK home when you have US tax exposure
Owning a home while you have cross-border tax ties brings four distinct tax moments you must plan for — each with different rules in each country.
First, the purchase. Stamp Duty Land Tax (SDLT) can carry a 2% non-resident surcharge plus a 5% additional dwelling surcharge for anyone who already owns property. These rates stack, so a non-resident buyer purchasing a second property may face a significantly higher upfront cost than a UK-resident first-time buyer. The 2% non-resident surcharge can be reclaimed if the buyer spends 183 or more days in the UK within one of the tax years either side of the purchase — so timing your move matters.
Selling and capital gains
The UK may grant full principal private residence (PPR) relief, removing UK CGT entirely on a main home that has been your only or main residence throughout ownership. By contrast, the US limits main-home relief to $250,000 (single) or $500,000 (married filing jointly), calculated in US dollars. That mismatch can leave a US tax bill even where UK tax is nil — particularly on London and South East properties that have seen significant capital growth. Keep purchase price and major improvement cost records in both sterling and USD equivalents from day one.
Ownership and gifts
Holding title in a non‑US spouse’s name can help shield value from US estate tax on US-situs assets. But if a US citizen spouse contributes funds towards a purchase held in a non-US spouse’s name, that contribution can count as a gift for US purposes. In 2025 the annual exclusion for gifts to a non‑US citizen spouse is $190,000. Use this allowance to rebalance ownership gradually and avoid making large immediate gifts that trigger US gift tax reporting or liability.
Sterling mortgages and phantom gains
Repaying a sterling mortgage can create foreign-exchange “phantom gains” in US dollar terms. If the pound weakens against the dollar between mortgage drawdown and repayment, the IRS may treat the difference as a taxable gain — even though you have made no real economic profit in sterling terms. Track exchange rates at purchase, mortgage drawdown and each significant repayment to support your US tax filings.
| Moment | Key risk | Quick action |
|---|---|---|
| Buying | Stacked SDLT surcharges (non-resident + additional dwelling) | Check non‑resident reclaim rules and 183-day timing |
| Selling | UK PPR relief may not match US $250k/$500k exclusion | Keep dual-currency records; model both systems before sale |
| Owning | Gifts when funding title held by non-US spouse | Use $190,000 annual gift exclusion; document contributions |
| Repayments | FX “phantom” gains in USD on sterling mortgage | Document FX rates at each stage; consult cross-border tax adviser |
Checklist before you commit: confirm SDLT position, agree how title will be held, record all costs in both currencies, and ask your conveyancer and cross-border tax adviser about the 183‑day reclaim route. For guidance on home purchases for American individuals see this practical guide.
Trusts, entities and family structures that can create inheritance tax and income tax issues
Trusts and company wrappers are where small classification errors become long and expensive tax headaches. We map the common traps and practical next steps. Remember, a trust is not a separate legal entity — it is a legal arrangement under English law, where the trustees hold legal title to the assets for the benefit of the beneficiaries. England invented trust law over 800 years ago, and the distinction between legal and beneficial ownership remains the foundation of how trusts work here.
Foreign trust pitfalls
Foreign trusts can trigger UK anti‑avoidance rules, particularly the transfer of assets abroad provisions and the settlements legislation. Income or gains built up in a trust before you moved to the UK may still be attributed to you and taxed after arrival if you are a beneficiary. Mandatory Trust Registration Service (TRS) registration applies once a trustee or beneficiary has UK residence — within 90 days for new trusts. The TRS register is not publicly accessible (unlike Companies House), but compliance is strictly enforced.
Excluded property and lost protection
Excluded property trusts have traditionally helped non-UK domiciled (and now non-long-term resident) individuals keep overseas assets outside the scope of UK IHT. But protection can vanish if long‑term resident status is reached or regained under the new 10-out-of-20 test. Keep a clear year‑count and review trust deeds before any residency move to understand exactly when protection would be lost.
US revocable trusts, LLCs and corporate classification mismatches
US revocable trusts serve a useful probate-avoidance function in the American system but create complications in the UK. Because they are revocable, HMRC treats the assets as still belonging to the settlor — so they offer no IHT benefit whatsoever. They are also treated as settlor-interested for UK income tax purposes, meaning trust income is taxed on the settlor, not the trust. If you hold a US revocable trust and become UK resident, the US probate advantages do not translate into any UK tax advantage. A US LLC, meanwhile, is typically treated as transparent (disregarded) for US tax purposes but may be classified as an opaque company by HMRC. That two‑lens mismatch often causes unexpected tax charges and blocks foreign tax credits.
By contrast, an irrevocable discretionary lifetime trust established under English law — where the settlor excludes themselves from benefit — can provide genuine IHT planning advantages. Assets properly settled into such a trust, with the settlor surviving the initial transfer by seven years (or where the value falls within the available nil-rate band), can be outside the estate for IHT purposes. Discretionary trusts also provide protection against beneficiaries’ divorce, bankruptcy, and potential future care fee assessments. The key is specialist drafting that reflects both UK trust law and, where the family has US connections, the cross-border tax consequences.
Children’s accounts and practical choices
Junior ISAs and certain UK savings accounts can create foreign-tax and PFIC reporting issues for dual‑status children who are also US persons. For US-citizen children, Junior ISAs are not recognised as tax-advantaged by the IRS. Alternatives such as holding individual US securities, carefully selected US-domiciled funds, or appropriately structured bare trusts may work better depending on family circumstances — though bare trusts give the child an absolute right to the assets at age 18 under English law (the principle from Saunders v Vautier), which is not always desirable and offers no IHT efficiency or asset protection.
| Structure | Main UK risk | Practical action |
|---|---|---|
| Foreign trust | Attributed income to UK-resident beneficiary; TRS registration required | Check trustee and beneficiary residence; file TRS registration promptly |
| Excluded property trust | Loss of IHT protection on reaching LTR status | Model year counts carefully; revise strategy before threshold is met |
| LLC / US entity | Classification mismatch between IRS and HMRC; blocked credits | Reassess entity classification in both jurisdictions; seek professional review |
| Junior ISA / children’s accounts | PFIC and US reporting risks for dual-status children | Use IRS-compatible investment vehicles; document everything |
Keep family structures as simple as possible where the cross-border position allows. Simplicity reduces reporting, lowers long‑term compliance costs and cuts the chance of nasty surprises. But “simple” in a cross-border context still requires specialist advice — the law, like medicine, is broad. You wouldn’t want your GP doing surgery.
Working with cross-border professionals to implement a durable plan
Small timing slips and missing documents often cause the biggest headaches in cross-border matters. Getting the right team in place early is the single most valuable step.
We act as the hub. We bring cross-border tax advisers, private client solicitors and wealth managers into one clear process. This reduces repeated work, prevents contradictory actions, and ensures the UK estate plan works alongside (not against) the US position.
What to bring to your advisers
- Complete asset inventory with recent statements for both UK and US holdings.
- Cost bases in both currencies, account numbers and any trust deeds, company documents or entity formation papers.
- Residency timeline showing each tax year and country of residence, plus day counts.
- Existing wills (UK and US), beneficiary nomination forms, and any Lasting Powers of Attorney.
How we coordinate to avoid gaps
We establish a clear lead adviser. That person signs off on timing, sequencing, and filing responsibilities across both jurisdictions.
Typical gaps we close include mismatched beneficiary nominations between pension schemes and wills, an investment switch that inadvertently creates PFIC or offshore income gain exposure, a property sale that triggers an unforeseen charge in one jurisdiction, or a trust structure that works perfectly for US purposes but creates attributed income problems in the UK. Not losing the family money provides the greatest peace of mind above all else — and in cross-border planning, the risks of getting it wrong are multiplied.
| Role | Main task | When they act |
|---|---|---|
| Cross-border accountant | File UK and US returns; claim treaty relief; coordinate credits | Before and after every liquidity event, disposal or remittance |
| Private client solicitor | Draft UK wills, lifetime trusts and QDOT provisions; review LPAs | At document reviews, pre-move planning and major life events |
| Wealth manager | Implement asset restructuring; flag PFIC and reporting fund risks | When reallocating holdings or onshoring funds |
Start early. Treaty claims, entity restructuring and trust reviews take time — often months, not weeks. For guidance on moves and timing see our article on moving abroad for retirement. Good co‑ordination saves time, reduces tax risk across both jurisdictions, and gives you a plan that works when life changes — not just on the day it was written.
Conclusion
Good cross‑border estate planning is less about clever tricks and more about clear timing, correct ownership structures and joined‑up advice across both jurisdictions.
Three drivers decide most outcomes: where you are resident and how many tax years that counts for under the new long-term residence test, what assets you own and how they are held, and whether treaty relief will actually apply given the timing of events in each country.
Remember April 2025: the long‑term residence test makes your residence history a planning asset — or a liability. A residence tail of up to 10 years and the seven‑year potentially exempt transfer survival period can keep worldwide value within IHT scope long after you think you have moved on. UK IHT sits at 40% above the nil‑rate band of £325,000 (frozen since 2009), and the proposed April 2027 change could bring unused pensions into that net too. Trusts are not just for the rich — they’re for the smart. For families with cross-border holdings, a properly structured lifetime trust under English law can provide IHT planning, asset protection and probate bypass in one arrangement.
Next steps: update your wills (both UK and US) and LPAs, review all investment holdings for PFIC and reporting fund risk, map your IHT exposure under the new LTR rules, and build a co‑ordinated team of cross-border advisers who talk to each other. Document every decision so your family and executors can act with confidence when the time comes. Plan, don’t panic — but do plan now.