Which Countries Don’t Have Inheritance Tax? Your Guide

Last reviewed: 24 May 2026 by the MP Estate Planning editorial team. Jurisdiction: England and Wales. Scotland and Northern Ireland have different probate and intestacy rules; the IHT thresholds are UK-wide.

Protecting your estate from unnecessary inheritance tax (IHT) is a top priority for many UK homeowners. With the nil rate band frozen at £325,000 (gov.uk — Inheritance Tax) since 2009 — and the average home in England now worth around £290,000 — more ordinary families than ever are being caught by IHT. Effective estate planning can help safeguard your legacy and ensure your loved ones receive their inheritance without a 40% tax bill eating into it.

While some countries around the world have abolished inheritance tax entirely, the reality for most UK-domiciled individuals is that HMRC’s rules follow you wherever your assets are. Understanding both the global landscape and what you can do right here in England and Wales is essential for making smart decisions about your estate.

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Key Takeaways

• Several countries worldwide have no inheritance tax — but UK-domiciled individuals remain liable for IHT on their worldwide assets regardless of where those assets are located.
• The UK charges IHT at 40% on estates above the nil rate band of £325,000 (frozen since 2009, confirmed frozen until at least April 2031).
• Effective estate planning — including lifetime trusts, gifting strategies, and proper use of reliefs — can significantly reduce or even eliminate your IHT liability without leaving the UK.
• Understanding international tax treaties is essential if you hold assets abroad, as double taxation can occur.
• Specialist guidance ensures your estate plan is legally robust and tailored to your specific circumstances.

Understanding Inheritance Tax

Understanding inheritance tax is crucial for effective estate planning and ensuring your loved ones are protected. In the UK, inheritance tax can take up to 40% of everything you’ve worked a lifetime to build — and with property values rising while the nil rate band stays frozen, the number of families affected grows every year.

What is Inheritance Tax?

Inheritance tax (IHT) is a tax charged on the estate of someone who has died. Your “estate” includes everything you own: your home, savings, investments, pensions (from April 2027), and personal possessions — minus any debts and liabilities. In the UK, IHT is charged at 40% on the value of your estate that exceeds the nil rate band. A reduced rate of 36% applies if you leave at least 10% of your net estate to charity.

The critical point many people miss is that IHT in the UK is based on domicile, not just residence. If you are UK-domiciled — which most people born and raised in England and Wales are — HMRC can charge IHT on your worldwide assets, regardless of where they are located. This is why simply holding assets in a country with no inheritance tax doesn’t automatically protect you from HMRC.

How Inheritance Tax Works in the UK

In the UK, IHT is charged on the transfer of assets from the deceased to their beneficiaries. The tax is usually paid by the executors of the estate before the assets are distributed — and crucially, the IHT bill often needs to be paid before the Grant of Probate is issued, which means executors may need to find the cash before they can access the deceased’s bank accounts or sell property. There are certain thresholds and allowances that can reduce the amount of tax payable:

Unused NRB and RNRB can transfer between spouses and civil partners, giving a married couple a potential combined threshold of up to £1,000,000 (£650,000 NRB + £350,000 RNRB). However, the RNRB tapers away by £1 for every £2 the estate exceeds £2,000,000 in value. Because the NRB has been frozen since 2009, inflation and rising property prices have dragged hundreds of thousands of ordinary families into the IHT net — people who would never have considered themselves “wealthy.”

Common Myths about Inheritance Tax

There are several myths surrounding inheritance tax that can lead to confusion and poor planning. One common myth is that IHT is only for the very wealthy. In reality, with the average home in England now worth around £290,000, a homeowner with modest savings and a pension can easily have an estate above the £325,000 threshold. If you’re single or don’t qualify for the RNRB, the threshold is even lower in practical terms.

Another myth is that you can simply give away your assets before you die to escape IHT. While gifting can be a useful strategy, there are important rules to understand. Gifts to individuals are “potentially exempt transfers” (PETs) — they only fall outside your estate if you survive for seven years after making them. And if you give away an asset but continue to benefit from it (such as gifting your home but continuing to live in it rent-free), HMRC treats this as a “gift with reservation of benefit” and the asset remains in your estate for IHT purposes, even if you survive the seven years.

A third myth is that moving your assets abroad will protect them from UK IHT. As we’ll explore in this article, if you are UK-domiciled, HMRC charges IHT on your worldwide assets — no matter which country they’re held in. Understanding the facts and dispelling these myths is the first step towards effective estate planning.

Countries Without Inheritance Tax

A number of countries around the world have either never had an inheritance or estate tax, or have abolished one in recent decades. While this makes for interesting reading, the practical relevance for UK-domiciled individuals is limited unless you’re genuinely considering a permanent change of domicile — which is a significant legal step with far-reaching consequences. Let’s look at the landscape.

List of Countries with No Inheritance Tax

Several countries currently have no inheritance tax or estate tax of any kind. Some of the most commonly cited include:

• Australia (abolished estate duty in 1979)
• Canada (no inheritance tax, though capital gains tax applies on death)
• New Zealand (abolished estate duty in 1992)
• Estonia
• Hong Kong (abolished estate duty in 2006)
• Singapore (abolished estate duty in 2008)
• Sweden (abolished inheritance tax in 2005)
• Austria (abolished inheritance tax in 2008)
• Russia
• United Arab Emirates
• Israel
• India
• China

It’s worth noting that “no inheritance tax” doesn’t necessarily mean “no tax on death.” Countries like Canada impose capital gains tax on deemed dispositions at death, and Australia taxes superannuation (pension) death benefits in certain circumstances. The headline “no inheritance tax” can be misleading.

Key Characteristics of These Countries

Countries that have abolished inheritance tax often share certain characteristics:

1. Alternative revenue sources: Many compensate through higher income tax, consumption taxes (like VAT or GST), capital gains tax on death, or resource revenues (as in the UAE’s case, from oil wealth).
2. Policy rationale: Some abolished inheritance tax because it raised relatively little revenue compared to the administrative cost of collection. Sweden’s inheritance tax, for example, was repealed partly because it was seen as penalising family-owned businesses.
3. Economic incentives: Several of these jurisdictions actively use their outside the scope of IHT status to attract foreign investment, high-net-worth individuals, and businesses.

The critical point for UK readers: Even if you hold assets in one of these countries, if you are UK-domiciled, HMRC will still include those assets in your estate for IHT purposes. The UK has double taxation treaties with some countries to prevent assets being taxed twice, but these treaties don’t eliminate the UK’s right to charge IHT — they merely prevent you paying both UK IHT and a foreign equivalent on the same asset.

Rather than focusing on where to move your assets, most UK families are better served by using the estate planning tools available right here — lifetime trusts, proper use of exemptions and reliefs, and structured gifting — to reduce or eliminate their IHT exposure without leaving the country.

Advantages of No Inheritance Tax Countries

Countries without inheritance tax offer certain advantages that are worth understanding, even if the practical application for UK-domiciled families is more nuanced than it first appears.

Financial Benefits for Families

The most obvious advantage is that families in these jurisdictions keep more of their wealth when it passes between generations. In the UK, by contrast, a family home worth £500,000 owned by a single person could attract an IHT bill of £70,000 (after the £325,000 nil rate band). That’s money taken from the family — not for income they’ve earned, but simply for dying.

For UK families who cannot realistically relocate, the good news is that there are powerful domestic tools available. A well-structured lifetime trust — such as a Family Home Protection Trust or a Gifted Property Trust — can achieve similar results to living in a no-IHT country by moving assets outside your taxable estate while you’re still alive. England invented trust law over 800 years ago — these are not loopholes, they’re the legal bedrock of property ownership in this country.

Encouragement of Wealth Transfer

Countries without inheritance tax tend to see smoother intergenerational wealth transfer. Without a 40% tax bill landing on the family at the worst possible moment, assets pass intact to the next generation. This supports family financial stability, enables children to get on the property ladder, and — as Mike Pugh often says — “keeping families wealthy strengthens the country as a whole.”

For UK-domiciled individuals, the practical takeaway isn’t necessarily to move abroad. It’s to use the available planning tools — lifetime trusts, the annual gift exemption (£3,000 per year), normal expenditure out of income, the spouse exemption, and charitable giving — to replicate the effect of living in a no-IHT jurisdiction, without actually having to leave.

Case Studies: Countries Without Inheritance Tax

To understand how no-IHT jurisdictions work in practice, let’s examine two popular examples — the UAE and New Zealand — and consider what lessons UK families can draw from their approaches.

UAE: A Wealth Haven

The United Arab Emirates has established itself as a magnet for wealth, attracting individuals and families from around the globe. Key features of the UAE’s fiscal environment include:

• No personal income tax
• No inheritance tax or estate duty
• No capital gains tax for individuals
• A stable political and economic environment

However, there are important caveats for UK nationals. If you are UK-domiciled and hold property or assets in the UAE, HMRC will still include those assets in your estate for IHT purposes. Changing your domicile from the UK is a complex legal process — it requires demonstrating that you have permanently severed ties with the UK and intend to live in the new country indefinitely. Simply buying property in Dubai or spending winters there is not enough to change your domicile.

Additionally, the UAE applies Sharia law to inheritance for Muslim residents, and non-Muslim expats have historically faced complications with asset succession unless they register a will with the DIFC Wills Service Centre. It’s a reminder that “no inheritance tax” doesn’t mean “no inheritance complications.”

New Zealand: The No Inheritance Tax Paradise

New Zealand abolished its estate duty in 1992 and has had no inheritance tax since. It combines this with political stability, a high quality of life, and a transparent legal system. However, New Zealand does impose income tax (up to 39%), and there are ongoing policy discussions about introducing a capital gains tax on property — so the tax environment is not as simple as the “no inheritance tax” headline suggests.

The key lesson from both case studies is the same: for UK-domiciled individuals, the country where your assets sit matters far less than your domicile status and the estate planning arrangements you have in place. A properly structured lifetime trust in England can protect your assets from IHT far more effectively — and far more practically — than relocating to the other side of the world.

Other Fiscal Policies in No Inheritance Tax Countries

The absence of inheritance tax is just one piece of a country’s fiscal puzzle. Before making any decisions based on a “no IHT” headline, it’s essential to understand what other taxes may apply and how the overall tax burden compares to the UK.

Alternative Taxes to Consider

Countries without inheritance tax often generate revenue through other means. Some of the most common alternative taxes include:

• Capital Gains Tax on Death: Canada, for example, treats death as a “deemed disposition” — meaning all assets are treated as if they were sold at market value on the date of death, triggering capital gains tax. This can result in a substantial tax bill, even though it’s not technically called “inheritance tax.”
• Wealth Tax: Some European countries impose an annual tax on net wealth, which can erode assets over time in a way that a one-off inheritance tax does not.
• Higher Income Tax: Countries like New Zealand and Sweden compensate for their lack of inheritance tax with higher income tax rates.

Incentives for Foreign Investors

Many countries without inheritance tax actively court foreign investment through residency-by-investment programmes, tax holidays, and favourable treatment of foreign-sourced income. Portugal’s former “Golden Visa” programme and its Non-Habitual Resident (NHR) tax regime attracted many UK retirees, though significant changes have been made to both schemes in recent years.

The important point is that these incentives are typically designed for people who are genuinely relocating — not for UK residents who want to hold assets offshore while continuing to live in England. HMRC’s rules on domicile, the “deemed domicile” provisions (which treat anyone who has been UK-resident for 15 of the last 20 tax years as UK-domiciled for IHT purposes), and anti-avoidance legislation make offshore planning risky and complex for most UK families. In practice, domestic planning through lifetime trusts and proper use of reliefs is far more effective and carries far less risk.

Impact on Expats Considering Relocation

For UK expats considering relocation, inheritance tax is often a significant factor in their decision-making. However, the reality is more complex than many people expect — moving abroad doesn’t automatically free you from UK IHT.

Why Expats Choose No Inheritance Tax Countries

Expats are often drawn to countries without inheritance tax for understandable reasons:

• Perceived Financial Benefits: The idea of not losing 40% of your estate to tax is compelling. For a UK family with a £700,000 estate, the IHT bill could be £150,000 or more — enough to buy a house outright in many parts of the country.
• Simplified Succession: In countries without inheritance tax, the transfer of assets on death can be more straightforward — no IHT400 forms, no waiting for HMRC clearance, no need to find cash to pay the tax bill before accessing the estate.
• Quality of Life: Many no-IHT countries (New Zealand, Portugal, the UAE) also offer attractive climates, lower costs of living, or other lifestyle benefits that compound the appeal.

Potential Legal Implications

Before packing your bags, there are critical legal implications that every UK expat must understand:

1. Domicile vs Residence: UK IHT is based on domicile, not residence. Your domicile of origin (usually where your father was domiciled when you were born) is remarkably “sticky” — you can live abroad for decades and still be treated as UK-domiciled if you haven’t demonstrably acquired a new domicile of choice. Even if you succeed in changing your domicile, the “deemed domicile” rules mean you’ll be treated as UK-domiciled for IHT purposes if you were UK-resident for at least 15 of the previous 20 tax years.
2. UK-Situated Assets: Even non-UK-domiciled individuals are liable for UK IHT on their UK-situated assets (primarily UK property and UK bank accounts). Moving yourself abroad while keeping your family home in England achieves very little from an IHT perspective.
3. Double Taxation Treaties: The UK has IHT double taxation treaties with only a handful of countries (including France, Ireland, Italy, the Netherlands, South Africa, Sweden, and the USA). For countries without a treaty, relief from double taxation may be available unilaterally, but it’s not expected and can be complex to navigate.
4. Cross-Border Succession: The EU Succession Regulation (Brussels IV) may apply in some European countries and could determine which country’s law governs the succession of your assets — adding another layer of complexity.

The bottom line: for the vast majority of UK families, domestic estate planning using lifetime trusts, gifting strategies, and proper use of available reliefs is more practical, more cost-effective, and more certain in outcome than attempting to escape UK IHT through relocation.

Strategies for Protecting Your Estate

Rather than chasing a life abroad to avoid IHT, let’s look at what you can actually do right here in England and Wales. As Mike Pugh says, “Trusts are not just for the rich — they’re for the smart.” Effective estate protection involves using the tools that English law has provided for over 800 years.

Setting Up Trusts

Lifetime trusts are the most powerful tool available for protecting your estate from IHT, care fees, and family disputes. When you place assets into a properly structured lifetime trust, those assets are held by the trustees — not by you — which means they can fall outside your taxable estate for IHT purposes and are not assessed as your capital if you ever need local authority-funded care.

The most common types of trust used in estate planning are:

• Discretionary Trusts: By far the most widely used (and most protective). Trustees have absolute discretion over who receives what and when. No beneficiary has a legal right to the trust assets, which is what provides protection from divorce, bankruptcy, care fee assessments, and IHT. Discretionary trusts can last up to 125 years and are subject to the relevant property regime — but for most family homes below the nil rate band, the periodic (10-year) charges and exit charges are often zero.
• Interest in Possession Trusts: An income beneficiary (the “life tenant”) has the right to income from the trust assets or to use the trust property (e.g., live in the house). When their interest ends, the capital passes to the remainderman. These are commonly used in will trusts to prevent sideways disinheritance — for example, ensuring a surviving spouse can live in the family home for life, but the property ultimately passes to the children of the first marriage.
• Bare Trusts: The beneficiary has an absolute right to the capital and income at age 18. The trustee is merely a nominee. Bare trusts offer no IHT protection (assets are treated as belonging to the beneficiary), no care fee protection, and no divorce protection. They have limited application in estate planning.

A well-structured lifetime trust — such as MP Estate Planning’s Family Home Protection Trust or Gifted Property Trust — typically costs from £850, depending on complexity. When you compare that to the potential IHT bill (40% of everything above £325,000) or the cost of care fees (currently around £1,200-£1,500 per week), the trust pays for itself many times over. It’s a one-time cost — equivalent to roughly one to two weeks of care home fees — versus an open-ended liability that could consume your entire estate.

Gifting Assets in Advance

Gifting assets in advance is another strategy to reduce your estate’s IHT liability. Gifts to individuals are “potentially exempt transfers” (PETs) — if you survive for seven years after making the gift, it falls completely outside your estate. If you die within seven years, the gift uses up your nil rate band first, and taper relief (HMRC IHTM14612) may reduce the tax on gifts that exceeded £325,000:

• 0-3 years before death: 40% tax
• 3-4 years: 32%
• 4-5 years: 24%
• 5-6 years: 16%
• 6-7 years: 8%
• 7+ years: 0% — completely outside the estate

There are also annual exemptions that can be used outside the scope of IHT immediately: £3,000 per year (with one year’s carry-forward), small gifts of £250 per recipient, and wedding gifts (£5,000 from a parent, £2,500 from a grandparent, £1,000 from anyone else). Regular gifts from surplus income — provided they form a pattern and don’t affect your standard of living — are also immediately exempt with no seven-year wait.

Important warning: If you gift your home but continue to live in it, HMRC treats this as a “gift with reservation of benefit” — and the property remains in your estate for IHT purposes, even if you survive seven years. This is why specialist advice is essential. A properly structured trust with appropriate provisions can navigate these rules lawfully.

It’s also important to note that transfers into discretionary trusts are not PETs — they are chargeable lifetime transfers (CLTs). An immediate 20% entry charge applies on any value above the available nil rate band at the time of transfer. For most families putting the family home into trust, if the value is below £325,000 (or £650,000 for two trusts established by a married couple), there is no entry charge at all.

How to Plan Your Estate Effectively

Whether you’re looking at international options or focusing on UK-based planning, effective estate management starts with getting specialist advice. As Mike Pugh often says, “The law — like medicine — is broad. You wouldn’t want your GP doing surgery.” Estate planning is a specialism, and getting it wrong can be extremely costly.

Consultation with Specialist Advisers

One of the most critical steps in effective estate planning is consulting with a specialist — not a general high-street solicitor who handles conveyancing and divorces on the side, but someone who works with trusts, IHT, and estate protection every day. A specialist can:

• Carry out a comprehensive threat analysis of your estate (MP Estate Planning uses a proprietary 13-point analysis through its Estate Pro AI software)
• Identify your specific IHT exposure — including assets you might not have considered, such as life insurance policies and pensions (pensions become liable for IHT from April 2027)
• Recommend the right type of trust for your circumstances — a Family Home Protection Trust, Gifted Property Trust, Settlor Excluded Asset Protection Trust, or Life Insurance Trust
• Ensure your plan doesn’t fall foul of HMRC anti-avoidance rules (gift with reservation of benefit, pre-owned assets tax, deprivation of assets)

Importance of Comprehensive Will Planning

A comprehensive will is the foundation of any estate plan — but a will alone is not enough. A will only takes effect after you die, and everything in your will must go through probate. During probate (which can take 3-12 months, or longer if property needs to be sold), all sole-name assets are frozen. Your family cannot access bank accounts, sell the house, or distribute anything until the Grant of Probate is issued. The will also becomes a public document once the Grant is issued — anyone can obtain a copy for a small fee.

By contrast, assets held in a lifetime trust bypass probate entirely. Trustees can act immediately on the settlor’s death — there is no asset freeze, no public record of what was in the trust, and no delay. This is why we recommend using a will alongside a trust — the will catches any assets not already in the trust, and the trust does the heavy lifting of protecting the family home and major assets.

Key elements of a comprehensive estate plan include:

1. A properly drafted will that coordinates with your trust arrangements
2. One or more lifetime trusts to protect your home and major assets from IHT, care fees, and family disputes
3. Lasting Powers of Attorney (LPAs) for both property and financial affairs, and health and welfare — so your chosen people can act for you if you lose mental capacity
4. Regular reviews — at least every 3-5 years, or whenever there’s a significant life event (marriage, divorce, birth, death, property purchase, change in the law)

Resources for Further Information

To make informed decisions about your estate, it’s essential to have access to reliable, UK-specific resources. The international landscape is interesting, but the laws that actually apply to your estate are those of England and Wales (or Scotland, if that’s where you’re domiciled).

Government Websites

The most reliable source of information on UK inheritance tax is HMRC and the UK Government’s own guidance:

• GOV.UK — the official government website has comprehensive guidance on IHT thresholds, reliefs, and how to report and pay IHT
• HMRC’s Trusts and Estates guidance — covers trust registration (TRS), trust taxation, and reporting requirements
• The Probate Registry — provides information on applying for a Grant of Probate or Letters of Administration

Specialist Estate Planning Services

For personalised guidance tailored to your specific situation, working with a specialist estate planning practice is essential. Look for a provider that:

• Specialises exclusively in trusts and estate planning (not a general practice that does some estate work on the side)
• Is transparent about pricing — MP Estate Planning is the first and only company in the UK that actively publishes all prices on YouTube
• Can explain the legal basis for their recommendations in plain English, not jargon
• Has experience with the specific trust arrangements relevant to your situation (property trusts, life insurance trusts, asset protection trusts)

By leveraging both government resources and specialist advice, you can build an estate plan that genuinely protects your family — whether your assets are all in the UK or spread across multiple jurisdictions.

Common Mistakes to Avoid

As you plan your estate, understanding the most common pitfalls can save your family significant money and stress. We see these mistakes regularly, and they’re almost always avoidable with proper guidance.

Overlooking Cross-Border Tax Implications

When assets are held in multiple countries, the risk of double taxation — or unexpected tax bills — increases significantly. The most common mistake is assuming that because your assets are in a no-IHT country, they’re safe from UK IHT. They’re not — if you’re UK-domiciled, HMRC wants its share of your worldwide estate.

To avoid this:

• Check whether a double taxation treaty exists between the UK and the country where your assets are held. The UK has IHT treaties with only a small number of countries.
• Seek advice from a solicitor or tax adviser with specific experience in cross-border estates — this is a niche area and general advisers frequently get it wrong.
• Consider whether placing overseas assets into a UK trust arrangement might simplify succession and reduce the IHT exposure.
• Ensure you have a valid will that covers your overseas assets — in some jurisdictions, a separate local will may be needed alongside your UK will.

For more detailed information on cross-border inheritance tax, you can visit our resource on cross-border inheritance tax.

Misunderstanding Local Laws

Each jurisdiction has its own succession laws, and they can differ dramatically from English law. For example:

1. Forced heirship rules: Many European countries (France, Spain, Italy) have forced heirship provisions that require a portion of your estate to go to certain family members, regardless of what your will says. This can conflict with your UK will and trust arrangements.
2. Different treatment of trusts: English trust law is not universally recognised. Many civil law jurisdictions don’t have an equivalent concept, which can create complications when trust-held assets are located in those countries. England invented trust law over 800 years ago, but many other legal systems simply don’t have the same framework.
3. Failure to update plans: Tax laws change — Portugal’s NHR regime has been reformed, the UK’s RNRB may not exist forever, and the freeze on the nil rate band could technically be extended further. Regular reviews (at least every 3-5 years) are essential.

By being aware of these common mistakes and taking proactive steps to avoid them, you can ensure that your estate plan actually works as intended — rather than creating the very problems it was supposed to prevent.

Preparing for the Future

We’re here to help you take practical steps towards protecting your estate. As Mike Pugh says, “Plan, don’t panic.” The worst time to start planning is when you urgently need to — the best time is now, while you’re healthy and have options.

Evaluating Your Estate’s Value

Understanding the true value of your estate is the essential first step. Many people underestimate their exposure to IHT because they don’t realise what counts as part of their estate. HMRC includes:

In the example above, the total estate is £800,000. Even with the full NRB and RNRB (£500,000 for a qualifying individual), the IHT bill would be £120,000. For a single person without direct descendants (no RNRB), the bill would be £190,000. That’s money your family will never see.

Importance of Regular Estate Reviews

Your estate plan is not a “set and forget” document. Life changes — and so does the law. Regular reviews are essential to ensure your plan keeps pace with:

• Property value changes: The home you bought for £150,000 fifteen years ago may now be worth £350,000 — pushing your estate above the threshold
• Legislative changes: The inclusion of pensions in the IHT net from April 2027 is a prime example. The nil rate band freeze (in place since 2009, now extended to at least April 2031) is another
• Family changes: Marriage, divorce, births, deaths, and family disputes can all affect who should benefit from your estate and how
• Changes to your assets: Inheritance, downsizing, new investments, or business changes all alter your IHT exposure

We recommend reviewing your estate plan at least every 3-5 years, and immediately after any significant life event. A review with a specialist is a fraction of the cost of getting it wrong.

Get Professional Help

Whether you’ve been inspired by the idea of no-IHT countries or simply want to make sure your family doesn’t lose 40% of your estate to HMRC, the most important step is to get specialist advice. As we’ve seen throughout this article, the rules are complex — and the consequences of getting it wrong are measured in tens or hundreds of thousands of pounds.

Expert Advice for Your Estate

Our team of specialists at MP Estate Planning can help you:

• Carry out a full 13-point estate threat analysis using our proprietary Estate Pro AI software
• Identify your exact IHT exposure — including assets you may not have considered
• Recommend and set up the right trust arrangement for your situation — from £850 for straightforward cases
• Coordinate your trust with your will, LPAs, and other estate planning documents
• Provide ongoing support and guidance as your circumstances and the law evolve

To get started, contact us for a consultation. We’ll help you create a tailored plan that protects your family — because as Mike Pugh says, “Not losing the family money provides the greatest peace of mind above all else.”

Thinking about protecting your estate from inheritance tax?

Schedule a free consultation with our team to discuss your options — including lifetime trusts that can protect your family home.

Countries Without Inheritance Tax: A Comprehensive Global Overview

For UK residents exploring their options, understanding which countries sit outside the inheritance tax net is a useful starting point — though, as we explain below, relocation alone is rarely sufficient to escape HMRC’s reach. To provide proper context, it helps to understand where the UK sits within the global spectrum of inheritance and estate taxation.

The Global Spectrum of Inheritance and Estate Tax

Inheritance and estate taxes vary enormously across jurisdictions. At one end of the scale, Japan levies a top rate of 55% on inherited assets, making it the highest inheritance tax rate in the world. South Korea follows at 50%, with France and Belgium both reaching 40% or more in certain circumstances. The UK’s top rate of 40% — applied above the nil-rate band, which has been frozen at £325,000 since 2009 and is set to remain frozen until at least 2028 — places it firmly among the higher-taxing nations globally. HMRC’s inheritance tax guidance sets out how this threshold applies in practice. Notably, UK IHT receipts reached a record £7.5 billion in 2023/24, reflecting how fiscal drag is drawing more estates into scope over time.

At the other end of the spectrum, a substantial and growing number of countries levy no inheritance or estate tax whatsoever. In many cases these jurisdictions abolished such taxes following evidence that they encouraged capital flight or generated relatively little revenue. Understanding this landscape can be genuinely useful, provided readers also understand the legal constraints that may still apply to UK-domiciled individuals.

A Comprehensive List of Countries With No Inheritance Tax

The following countries are generally considered to fall outside the scope of inheritance or estate taxation, though individual circumstances, residency rules, and local legal nuances will always apply. This list is indicative rather than exhaustive, and professional advice should be sought before drawing any conclusions about personal liability.

• Australia — Abolished federal estate duty in 1979; no inheritance tax at federal or state level, though capital gains tax may arise on certain inherited assets.
• Canada — No formal inheritance tax; however, a deemed disposition rule on death may trigger capital gains tax on appreciated assets.
• New Zealand — No inheritance, estate, or gift tax; widely regarded as one of the most straightforward jurisdictions in this respect.
• United Arab Emirates (UAE) — No federal inheritance tax; under Sharia succession principles, the distribution of assets for non-Muslim expatriates can be complex and typically requires careful local legal planning.
• Singapore — Estate duty was abolished in 2008; no inheritance tax currently applies, and the jurisdiction is frequently cited for its favourable overall tax environment.
• Hong Kong — Estate duty abolished in 2006; no inheritance tax, though local stamp duties and other levies may apply to property transfers.
• Portugal — No inheritance tax on assets passing to direct family members (spouse, children, grandchildren, parents); more distant relatives and unrelated beneficiaries may face stamp duty at 10%.
• Sweden — Abolished inheritance and gift taxes in 2005; no such taxes currently apply at national level.
• Norway — Inheritance tax was abolished in 2014, though wealth tax on worldwide assets remains relevant for residents.
• Austria — Inheritance tax was abolished in 2008; no such tax currently applies, though real estate transfer tax may arise.
• Czech Republic — No inheritance tax for direct relatives and siblings since 2014; more distant heirs are subject to personal income tax on inherited amounts.
• Slovakia — No inheritance tax; assets inherited by any beneficiary are generally outside the scope of such taxation.
• Israel — Inheritance tax was abolished in 1981 and has not been reintroduced.
• Mexico — No federal inheritance tax, though income tax may apply to certain inherited amounts depending on how they are characterised.
• Russia — No inheritance tax since 2006; a notarial fee is payable but no substantive tax on inherited assets.
• China — No inheritance tax is currently in force at a national level, though proposals for such a tax have been discussed periodically.

In our experience, clients are sometimes surprised to find that several European countries — including Sweden, Norway, Austria, Portugal (for direct family), Slovakia, and the Czech Republic — have either abolished or significantly curtailed inheritance taxes. This challenges the assumption that no-inheritance-tax jurisdictions are exclusively offshore or exotic destinations.

What the UK’s Position Means in Practice

The UK’s combination of a frozen nil-rate band, a 40% top rate, and HMRC’s worldwide reach over UK-domiciled individuals means that — even when an estate would face no local inheritance tax in a destination country — UK inheritance tax may still apply in full. This is a critical distinction that is explored in more detail elsewhere in this article. The fact that roughly 1 in 25 UK estates currently pay inheritance tax (HMRC) may appear reassuring, but fiscal drag means this proportion is rising steadily, and for those with property or accumulated savings the exposure is often significant.

Common Questions About Inheritance Tax and Moving Abroad

Can I avoid inheritance tax by moving abroad?

Relocating to a country with no inheritance tax will not automatically remove a UK-domiciled person’s exposure to UK IHT. Under HMRC’s deemed domicile rules, an individual who has been resident in the UK for 15 of the previous 20 tax years is treated as deemed domiciled in the UK for inheritance tax purposes, meaning their worldwide assets typically remain within scope regardless of where they live. Only after an individual has been non-UK resident for a sufficient continuous period — and has taken formal steps to acquire a domicile of choice elsewhere — does the position begin to shift. This process is neither quick nor straightforward, and in our experience it is one of the most commonly misunderstood areas of cross-border estate planning. Readers in this position should seek advice from a qualified solicitor or regulated tax adviser before making any assumptions.

Which country has the highest inheritance tax in the world?

Japan currently levies the highest inheritance tax rate in the world, with a top marginal rate of 55% applied to the largest inherited amounts. South Korea (50%) and France (up to 45% for direct descendants on the largest estates, and higher for more distant relatives) also rank among the highest. The UK’s 40% flat rate above the nil-rate band places it within this upper tier, though the availability of various reliefs — including the residence nil-rate band and business property relief — can reduce effective rates in certain circumstances.

Is the UK the only country with inheritance tax?

No. A significant number of countries — including the United States, Germany, France, Japan, Spain, Belgium, and South Korea — levy some form of inheritance or estate tax. The UK is far from unique in this respect. However, many other developed economies have moved in the opposite direction, abolishing such taxes on the grounds that they are administratively complex, generate modest revenue relative to compliance costs, or distort economic behaviour. The global picture is therefore mixed, with no clear consensus on whether inheritance taxation is standard practice.

Is there no inheritance tax in the USA?

The United States does not levy a federal inheritance tax, but it does impose a federal estate tax on estates above a substantial exemption threshold — currently over $13 million per individual under 2024 rules, though this threshold is scheduled to reduce significantly after 2025 unless Congress acts. Separately, six US states (Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania) do levy a state-level inheritance tax. For UK residents with US connections, the US–UK estate tax treaty may be relevant, and specialist cross-border advice is strongly recommended.

How do ultra-wealthy individuals typically reduce inheritance tax?

Wealthy individuals generally use a combination of long-established, fully lawful estate planning strategies to manage IHT exposure. These may include making use of annual gift exemptions and potentially exempt transfers, establishing trusts (such as discretionary or interest-in-possession trusts), structuring assets to qualify for business property relief or agricultural property relief, taking out whole-of-life insurance written in trust to meet a known IHT liability, and — in some cases — formal changes of domicile following sustained periods of non-UK residence. Some individuals use family investment companies or other holding structures. None of these approaches is a guaranteed solution, and each carries its own legal, tax, and practical implications. Our team would always recommend working with a qualified solicitor and, where investment products are involved, a regulated financial adviser to ensure any strategy is appropriate to individual circumstances.