IHT for UK Expats: Inheritance Tax When You Live Abroad (2026)
Moving abroad does not automatically remove UK inheritance tax liability. UK domicile means worldwide IHT exposure wherever you live. From April 2025, the LTUR test means long-term UK residents need 20 years abroad before UK worldwide IHT ends. UK property is always subject to UK IHT — regardless of domicile.
IHT Rules for Expats and Non-Residents
Domicile determines your IHT exposure — not where you live
The most common misunderstanding for UK expats is that moving abroad removes UK IHT liability. It does not — at least not immediately. IHT is determined by domicile, not residence. A UK-domiciled individual (whether living in London or Sydney) has their worldwide estate subject to UK IHT. A non-UK-domiciled individual living in the UK (or anywhere else) has only their UK-situs assets subject to IHT. Where you pay tax on your income (residence for income tax purposes) has no bearing on your domicile for IHT. Even if you have lived in Spain for 20 years, you may still have a UK domicile — if you have not genuinely abandoned your UK domicile of origin and acquired a domicile of choice in Spain. Many long-term expats retain UK domicile because they have never firmly decided to remain abroad permanently.
Domicile of origin vs domicile of choice: how to change domicile
Domicile of origin: acquired at birth — typically follows the father's domicile at the time of birth (or the mother's if the parents were not married). A UK-born individual has a UK domicile of origin. Domicile of choice: acquired by physical presence in another country combined with a settled and permanent intention to remain there indefinitely. Both conditions must be met. Intention must be clear, unambiguous, and genuinely settled — not 'I might stay if I like it' but 'I have chosen to make France my permanent home and I have no intention of returning to the UK'. Evidence includes: property purchased abroad, foreign will made, community ties (club memberships, friendships, children in school), absence of UK property or permanent home kept in the UK, statements of intent in letters and documents. HMRC may challenge claimed changes of domicile — particularly where the individual retains strong UK connections. Crucially: if the UK domicile of choice is later abandoned, the domicile of origin revives automatically — even if you return to a third country, not the UK.
The Long-Term UK Resident (LTUR) test from April 2025
From 6 April 2025, the Finance Act 2025 replaced the deemed domicile rules (under which 15 out of 20 years UK residence triggered worldwide IHT) with the Long-Term UK Resident (LTUR) test. Under the LTUR test: (1) A person becomes a Long-Term UK Resident after 10 consecutive tax years of UK residence. From the 11th year, their worldwide estate is subject to IHT — regardless of their domicile. (2) To exit LTUR status after leaving the UK, a person must be non-UK-resident for 20 consecutive years. This is a longer tail than the previous 4-year tail under deemed domicile. (3) The LTUR test is residence-based, not domicile-based — it applies even where the individual has genuinely acquired a non-UK domicile of choice. Practical impact: a UK citizen who lived in the UK for 20 years, then moved to Dubai in 2020, remains LTUR until 2040 (20 years of non-residence). Their worldwide estate is subject to UK IHT for that entire period — even if they have changed domicile.
UK-situs assets: always in the IHT estate for non-doms
Where a person is not UK-domiciled and is not LTUR, only their UK-situs assets are subject to UK IHT. UK-situs assets include: UK real property (freehold and leasehold); UK shares (shares in UK-registered companies are UK-situs regardless of where they trade); UK bank accounts and cash held with UK banks; UK debts owed by UK persons; UK government securities; goodwill of a UK business. Non-UK-situs assets (foreign property, foreign bank accounts, shares in non-UK companies, foreign government bonds) are outside the UK IHT estate for non-doms. Many expats are surprised that their UK property remains taxable even after changing domicile — there is no domicile-based exemption for UK real estate. The IHT on UK property is paid by the estate or, if a non-resident beneficiary inherits directly, they may be assessed directly by HMRC.
Double tax treaties and overseas IHT
The UK has IHT double tax treaties with a small number of countries: France, India, Ireland, Italy, Netherlands, Pakistan, South Africa, Sweden, Switzerland, and the USA. These treaties prevent the same assets being taxed twice by both countries. The treaties typically allocate taxing rights: the country of domicile has the primary right to tax, with credit given for taxes paid in the other country. Outside these treaties, unilateral relief is available under s159 IHTA 1984 — a credit for foreign IHT paid on assets taxed in both the UK and a foreign jurisdiction. Many popular expat destinations (Spain, France without treaty, Portugal, UAE, Australia) either have no UK treaty or have treaties that do not cover all assets. Expats in non-treaty countries face double taxation on assets sited in both the UK and the country of residence — requiring careful planning.
Wills for expats: which law governs?
An expat with assets in multiple countries needs careful will planning. UK property must be dealt with under English law — a foreign will may not be recognised for UK probate purposes. A UK will governs UK assets; a separate foreign will may be needed for non-UK assets. Under EU Succession Regulation 650/2012 (still relevant to UK nationals with EU assets post-Brexit), individuals can elect for the law of their nationality to govern their succession — a UK national living in France can elect English law to apply to their entire estate (including French property), avoiding the forced heirship rules of French law. Note: a WillSafe will kit covers England and Wales assets. For non-UK assets, local legal advice is essential. A chain of wills (one per jurisdiction) is preferable to one omnibus will, to avoid each country's court needing to interpret a foreign document.
Frequently Asked Questions
If I move abroad, do I still have to pay UK inheritance tax?
It depends on your domicile and the new Long-Term UK Resident (LTUR) rules. If you are still UK-domiciled (most UK citizens who move abroad retain UK domicile for years), your worldwide estate is subject to UK IHT. From April 2025, even those who change domicile must be non-UK-resident for 20 years before UK worldwide IHT exposure ends (LTUR test). UK-situs assets (UK property, UK shares, UK bank accounts) are always subject to UK IHT regardless of domicile.
How long do I have to live abroad to avoid UK inheritance tax?
From April 2025, a Long-Term UK Resident (someone with 10+ consecutive years of UK residence) must be non-UK-resident for 20 consecutive years to fully exit UK worldwide IHT exposure. Before the LTUR test, the old deemed domicile rules required 15 of 20 UK years to trigger worldwide exposure and only 4 years abroad to exit. The new rules are significantly tighter. Additionally, even non-LTUR non-doms still pay UK IHT on all UK-situs assets (UK property, UK shares, UK bank accounts) forever.
Does my UK house remain subject to IHT if I live abroad?
Yes. UK real property is always a UK-situs asset and is always included in the UK IHT estate — regardless of your domicile or residence status. A non-domiciled, non-LTUR individual living in Dubai is not subject to UK IHT on their worldwide estate, but their UK house (being a UK-situs asset) is fully included in the UK IHT estate at its open market value. There is no exemption for non-doms on UK real estate.
What is the Long-Term UK Resident (LTUR) test and how does it affect expats?
From 6 April 2025, anyone who has been UK-resident for 10 or more consecutive tax years becomes a Long-Term UK Resident. From the 11th year of UK residence onwards, their worldwide estate is subject to UK IHT — even if they have changed domicile to a non-UK country. After leaving the UK, they must be non-UK-resident for 20 consecutive years before LTUR status ends. This significantly affects UK citizens who lived in the UK for most of their lives before emigrating.
Can I avoid UK inheritance tax by moving to a tax haven?
Moving to a low-tax country (UAE, Monaco, Cayman Islands) does not immediately remove UK IHT liability. If you are UK-domiciled, your worldwide estate is still subject to UK IHT. If you are LTUR (10+ years UK residence), you must be non-UK-resident for 20 years before UK worldwide exposure ends. After changing domicile and completing the LTUR tail period, non-UK assets would no longer be subject to UK IHT. However, UK property (regardless of where you live or your domicile) always remains in the UK IHT estate.
Note: WillSafe serves England and Wales only
WillSafe will kits cover England and Wales assets. If you live abroad and have assets in multiple jurisdictions, you will need separate legal advice for each country. A UK will can cover your UK assets — including UK property, UK bank accounts, and UK shares — while a separate will in your country of residence handles local assets.
A UK Will for Your UK Assets
Even if you live abroad, a UK will ensures your UK property, bank accounts, and other UK-situs assets pass according to your wishes — and that your UK estate is administered efficiently without unnecessary delay or costs.
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