UK Assets and Inheritance Tax for Non-Domiciled and Non-LTUK Individuals 2026: IHT on UK Property, Shares, and Bank Accounts, the Full NRB, and How to Plan Your UK Estate
Even if you are not UK-domiciled or Long-Term UK Resident, UK IHT applies to all your UK-situs assets at 40% above £325k. The full NRB is available. Offshore company structures for UK property have not worked since April 2017.
Non-Dom? Your UK Property, UK Shares, and UK Bank Accounts Are All Fully Within UK IHT
The non-dom IHT exemption protects your OVERSEAS assets (excluded property — s6 IHTA). It does NOT protect UK-situs assets. UK land, shares in UK companies, and UK bank accounts are always within UK IHT at 40% above your NRB — regardless of your domicile or LTUK status. A UK will and UK IHT plan is essential if you own any UK assets.
| Asset Type | IHT Position | Available Reliefs | Planning Guidance |
|---|---|---|---|
| UK land and buildings — residential and commercial | ALL UK LAND AND BUILDINGS are UK-situs and fully within UK IHT scope for a non-dom/non-LTUK individual. This includes: (1) UK residential property owned personally (a second home in London; a buy-to-let in Manchester; a holiday cottage in Cornwall — all UK-situs; all within IHT). (2) UK commercial property (office, retail, industrial). (3) UK agricultural land (farms, paddocks, woodland — subject to APR relief on agricultural value if APR conditions are met). (4) Freehold land and leasehold interests of any length. The non-LTUK individual pays IHT on the net value of the UK land at death (after deducting the NRB, RNRB where applicable, and any reliefs). VALUATION: the UK property must be valued at the date of death (market value — probate value; RICS valuation usually required for the IHT400). If the property is jointly owned: the deceased's share is included in their estate (a joint tenancy passes by survivorship; a tenancy in common — the deceased's share is in the estate). UK property can be valued after death for IHT purposes (on a sale within 4yr of death: the sale price replaces the probate value for IHT — s191 IHTA fall in value relief on qualifying investments also applies to land — s190 IHTA). | RNRB ON UK HOME: the Residence Nil-Rate Band (s8D IHTA — up to £175,000 in 2026-27) is available where a 'qualifying residential interest' (QRI — a UK home that the deceased occupied as their residence at some point) passes to 'direct descendants' (children, grandchildren, step-children, and their spouses). For a non-LTUK individual who owned a UK home and occasionally resided in it (e.g., a second home in the UK that they used as their UK pied-à-terre): the RNRB conditions must be met — the deceased must have lived in the property at some point (it is not sufficient that it was a buy-to-let never occupied). Specialist advice needed. RNRB taper: where the total estate (UK estate only, for a non-LTUK individual) exceeds £2m: RNRB is tapered (£1 for every £2 above £2m). For most non-LTUK individuals with only UK assets in scope: the UK estate is unlikely to trigger the £2m taper. APR ON UK FARMLAND: if the non-LTUK individual owns UK agricultural land that qualifies for APR (100% relief on agricultural value if occupied for the requisite period and meets the conditions): the agricultural value is exempt from IHT. The non-agricultural value (development value; hope value above agricultural use) remains within IHT — subject to the FA 2026 £1m cap on APR+BPR combined. | PLANNING FOR OVERSEAS INDIVIDUALS WITH UK PROPERTY: (1) HOLD UK PROPERTY JOINTLY WITH SPOUSE: if the surviving spouse is the sole beneficiary of the UK property (and is UK-domiciled/LTUK): the s18 spouse exemption applies — no IHT on the first death. The tNRB and tRNRB transfer to the surviving spouse for use at their death. (2) HOLD UK PROPERTY IN TRUST: a discretionary trust holding UK property is within IHT (the trustees of a UK-resident or non-UK-resident discretionary trust holding UK land are subject to UK IHT periodic/exit charges). However: trust ownership separates the property from the personal estate. (3) THE OFFSHORE COMPANY ROUTE IS CLOSED (since FA 2017): as noted above, holding UK residential property via an offshore close company brings the UK residential property into IHT via s48(3A) IHTA. The ATED (Annual Tax on Enveloped Dwellings) and SDLT surcharge also apply. Review any existing offshore structures holding UK property with specialist advisers. (4) UK WILL: every non-LTUK individual with UK property should have a UK will specifically covering UK-situs assets. Intestacy under UK law may not produce the intended outcome — especially for overseas nationals whose home country intestacy rules conflict with UK law. |
| Shares in UK-incorporated companies (LSE, AIM, private UK companies) | SHARES IN UK COMPANIES — ALWAYS UK-SITUS: a non-LTUK individual owning shares in any UK-incorporated company (listed on the LSE, AIM, AQSE, or unlisted) has UK-situs assets subject to UK IHT. The situs rule: shares in a company are situated in the country of INCORPORATION of that company — not where the shareholder lives, not where the shares are held (nominee, custodian account), not where the company operates. Examples: UK investor owning Apple (US-incorporated) shares via a UK stockbroker: US-situs (Apple is a US company); not UK IHT for a non-LTUK individual. Non-UK investor owning shares in BP plc (UK-incorporated, listed on LSE): UK-situs; fully within UK IHT even for a non-LTUK investor. A non-UK national owning UK-listed shares via an overseas brokerage account: still UK-situs (the COMPANY is UK-incorporated); within UK IHT. VALUATION: listed shares on UK exchanges are valued at the 'quarter-up' price on the date of death (the lower of: (closing price on date of death) + one-quarter of the difference between the closing and opening price; or the midpoint of the range of prices on the day of death — whichever is lower). Unlisted shares: specialist HMRC Shares Valuation team opinions or independent valuation. | BPR ON AIM SHARES AND UNLISTED UK COMPANIES: qualifying shares (AIM shares in a trading company; unlisted UK company shares that are wholly or mainly trading) may qualify for 100% BPR (s105 IHTA 1984) — reducing the value to nil for IHT purposes. After Finance Act 2026: the combined APR/BPR cap of £1m means BPR relief above £1m is only at 50%. A non-LTUK individual owning £500k of AIM shares qualifying for BPR: those shares are fully relieved (within the £1m cap); no IHT on those shares in the UK estate. London-listed large-cap shares (FTSE 100, FTSE 250 main market): do NOT qualify for BPR (listed on a recognised stock exchange = not qualifying for BPR as unlisted). AIM shares in qualifying trading companies: qualify for BPR. ISA WRAPPER: for a non-LTUK individual — UK ISAs are accounts with UK banks/investment managers; UK-situs. The ISA wrapper does not provide IHT exemption (ISAs are exempt from income tax and CGT within the wrapper, but the account balance is in the IHT estate on death — since the ISA wrapper ceases on death). | HOLDING UK SHARES FOR NON-LTUK INDIVIDUALS: (1) UK-listed shares are straightforward UK-situs assets for IHT: include in the IHT estate at death; claim NRB; assess any BPR qualifying shares. (2) PORTFOLIO SIZE: a non-LTUK individual with a £1m UK share portfolio and £325k NRB: taxable estate = £675k; IHT = £270k (40%). Consider whether BPR shares or other reliefs reduce this. (3) TRANSFER TO SPOUSE BEFORE DEATH: lifetime transfers to a UK-domiciled/LTUK spouse: no CGT (s58 TCGA no-gain/no-loss inter-spouse); no IHT (s18 IHTA spouse exemption). After transfer: the shares are in the spouse's estate (not the non-LTUK individual's estate). The spouse pays IHT on their worldwide estate (if UK-dom/LTUK) at their death. (4) BPR PORTFOLIO: replace standard UK listed shares with AIM BPR-qualifying portfolios — these remove the shares from the IHT estate after 2yr qualifying ownership. Many wealth managers offer IHT-focused AIM portfolios. (5) UK WILL: include the UK share portfolio in a UK will — specifying who should inherit and the executor's powers to transfer UK shares. Overseas nationals without a UK will may face expensive English probate proceedings for their heirs to access UK shares. |
| UK bank accounts and cash deposits | UK BANK ACCOUNTS — UK-SITUS: the situs of a debt (and a bank account is a debt — money owed by the bank to the account holder) is where the debt is properly recoverable. A UK bank account is situs in the UK (the UK bank branch is where the account is held; the debt is recoverable in the UK). This means: current accounts, savings accounts, fixed-term deposits at UK banks (including UK branches of foreign banks — e.g., an account at the UK branch of Deutsche Bank is a UK-situs debt). FOREIGN CURRENCY ACCOUNTS: a UK bank account denominated in US dollars, euros, or any other currency: still UK-situs (the situs is the bank's location, not the currency). IHT TREATMENT: the full balance of the UK bank account at the date of death is in the non-LTUK individual's UK estate for IHT. Interest accrued to the date of death is included. Joint accounts: the deceased's share is included (for joint accounts held equally: 50% of the balance; for accounts with different ownership ratios: the proportionate share). Offshore accounts: accounts at banks based outside the UK (e.g., at a Jersey bank; a Swiss bank; a Singapore bank): non-UK-situs; excluded property for a non-LTUK individual. Moving cash from UK accounts to offshore accounts during lifetime is a transfer that reduces the UK estate — but it must be a genuine transfer of funds to an offshore bank account and not a gift with reservation. | PRACTICAL POINT — QUICK ACCESSIBILITY FOR PROBATE: UK bank accounts are typically the most accessible UK assets for a non-LTUK individual's heirs after death. Grant of representation (probate) allows executors to access UK bank accounts. Some banks allow smaller accounts to be released without full probate (via their own bereavement process). For non-UK nationals: the UK probate process (applying to the Probate Registry in England & Wales; the sheriff court in Scotland; the Probate Registry in Northern Ireland) is necessary to access UK bank accounts above the bank's own threshold. UK WILL REQUIREMENT: without a UK will: the heirs must apply for Letters of Administration (on an intestacy basis) which is more complex and time-consuming than proving a UK will. A UK will appointing UK executors is ESSENTIAL for non-UK nationals with UK bank accounts. | PLANNING FOR UK BANK ACCOUNTS: (1) USE OFFSHORE ACCOUNTS WHERE POSSIBLE: non-LTUK individuals who need to hold cash internationally should prefer offshore accounts (Jersey, Isle of Man, Channel Islands, Singapore, Switzerland) over UK accounts — reducing the UK IHT estate. The cash must be genuinely held at an offshore bank (not just in an offshore subsidiary account of a UK bank). (2) LIFETIME GIFTS FROM UK ACCOUNTS TO FAMILY: cash gifts from UK bank accounts are PETs (if to individuals) or CLTs (if to trusts). PETs are exempt if the donor survives 7yr; CLTs immediately chargeable (20% on excess over NRB). Giving £3,000 per year from a UK account (annual exemption — s19 IHTA): immediately exempt; removes cash from the UK estate. (3) JOINT ACCOUNTS WITH SURVIVING SPOUSE: a UK joint account passes to the surviving account holder on death (survivorship — not through the estate). If the surviving spouse is UK-domiciled/LTUK: the full balance passes to the spouse IHT-free (s18 IHTA). But the joint account must be a GENUINE joint account (both parties have equal access and rights — not a nominee account in both names). (4) INCLUDE IN UK WILL: ensure all UK bank accounts are dealt with in the UK will — specify whether the accounts are for a specific legatee or fall into the residue. |
| IHT computation on UK estate of a non-LTUK individual — full worked example | WORKED EXAMPLE: a non-UK national (not LTUK — 5yr UK residence as of 2026) owns: UK property (London flat) worth £700,000; UK bank account (NatWest UK) worth £50,000; shares in BP plc (UK-incorporated) worth £150,000; French bank account worth £200,000; Spanish apartment worth £400,000; Italian investment portfolio (Italian bank) worth £300,000. UK ESTATE FOR IHT: only UK-situs assets: UK flat £700,000 + UK bank account £50,000 + BP shares £150,000 = £900,000 total UK estate. EXCLUDED PROPERTY (not in UK IHT): French bank account £200,000 (French bank; non-UK-situs); Spanish apartment £400,000 (overseas land; excluded); Italian portfolio £300,000 (non-UK bank; non-UK-situs). IHT CALCULATION: total UK estate = £900,000. NRB = £325,000. RNRB: if the UK flat passes to children AND the deceased lived in it at some point: RNRB potentially £175,000. Assuming RNRB applies: taxable estate = £900,000 − £325,000 − £175,000 = £400,000. IHT = 40% × £400,000 = £160,000. Effective tax rate on the UK estate: 17.8% (£160k IHT / £900k UK estate). Without RNRB: taxable = £575,000; IHT = £230,000. WITHUT NRB and no RNRB (impossible but illustrative): IHT = £360,000 (40% of £900k). | THE TRANSFERABLE NRB FOR NON-LTUK INDIVIDUALS: if the non-LTUK individual was married and their spouse died first (leaving the NRB unused — e.g., the first spouse's entire estate passed to the non-LTUK individual IHT-free under s18): the UNUSED NRB of the deceased spouse is transferred (tNRB — s8A IHTA). On the non-LTUK individual's death: tNRB is added to their own NRB = up to £650,000 combined NRB (if full tNRB available). Similarly for tRNRB (s8G IHTA). The tNRB/tRNRB is available to a non-LTUK individual in the same way as a UK-domiciled individual. Practical: a surviving non-LTUK individual with both NRB + tNRB = £650,000 NRB available. UK estate of £650k or below: no IHT on the UK assets. | UK ESTATE PLANNING FOR NON-LTUK INDIVIDUALS — CHECKLIST: (1) MAKE A UK WILL: cover UK land, UK shares, UK bank accounts. Appoint UK-resident executors (or UK solicitors) who can administer the UK estate. (2) CLAIM ALL AVAILABLE ALLOWANCES: NRB (£325k); tNRB from deceased spouse; RNRB (if QRI conditions met); tRNRB; BPR on qualifying shares. (3) REVIEW UK PROPERTY OWNERSHIP: individual ownership of UK property = in the UK IHT estate. Consider JOINT ownership with surviving spouse (passes by survivorship; no IHT at first death if spouse is UK-dom/LTUK). Discretionary trust ownership possible but adds complexity. (4) KEEP OVERSEAS ASSETS OVERSEAS: do not move overseas cash/investments to UK bank accounts unnecessarily — this converts excluded property (non-UK-situs; outside IHT) into UK-situs property (inside IHT). (5) BPR FOR UK EQUITY: if the UK equity portfolio includes AIM shares in qualifying trading companies: these may qualify for 100% BPR after 2yr holding — reducing the UK estate. Consider restructuring the UK equity portfolio toward BPR-qualifying assets (under specialist investment advice). (6) LIFETIME GIFTING FROM UK ESTATE: reduce the UK estate by making PETs (to individuals) or CLTs (to trusts) from UK assets — subject to the 7yr PET rule. Annual exemption (£3k/yr), small gifts (£250/person), and normal income expenditure exemptions reduce the UK estate immediately. |
| IHT on UK property via offshore holding companies — FA 2017 anti-avoidance (s48(3A) IHTA) | PRE-FA 2017 POSITION: before April 2017, non-dom individuals could hold UK residential property via a non-UK company (BVI, Cayman, Isle of Man, Jersey SPV etc.). The shares in the offshore company were non-UK-situs (company incorporated outside the UK) — and therefore excluded property for a non-LTUK individual. The UK land inside the company was held by the company; the individual held the shares (non-UK-situs; excluded property). This was a widely used IHT planning structure for non-doms owning UK residential property. FA 2017 CLOSED THIS ROUTE: Finance Act 2017 inserted s48(3A) IHTA 1984. From 6 April 2017: where a person has an 'interest' in a 'close company' (broadly, a company with 5 or fewer participators) or partnership that DERIVES ITS VALUE from a UK dwelling: that interest is treated as a 'UK residential property interest' and is NOT excluded property. The UK land inside the offshore company is effectively looked through — the value of the individual's shares (to the extent derived from UK residential property) is treated as UK-situs for IHT purposes. EFFECT: non-doms holding UK homes via BVI/Jersey/Cayman companies are now fully within UK IHT on the UK residential property element. The offshore company structure no longer provides IHT protection for UK residential property. | WHAT FA 2017 DOES NOT COVER: (1) UK commercial property: s48(3A) applies to 'UK dwellings' (residential property). UK commercial property held via an offshore company may still be excluded property for a non-LTUK individual (the offshore company shares are non-UK-situs; the value derived from UK commercial property is NOT within s48(3A)). Seek specialist advice on UK commercial property holding structures — the position is complex and depends on the company structure. (2) Offshore companies holding a MIXED portfolio (part UK residential; part non-UK assets): the s48(3A) look-through applies only to the UK residential element. The remainder of the offshore company (non-UK assets) may remain excluded property. Careful allocation of value is needed. (3) COLLECTIVE INVESTMENT SCHEMES (regulated investment funds): shares in a non-UK regulated fund that happens to invest in UK real estate may not be treated as a 'UK residential property interest' under s48(3A) — depending on the fund structure and whether it is a 'close company'. Specialist advice required. | WHAT TO DO WITH AN EXISTING OFFSHORE STRUCTURE HOLDING UK PROPERTY: (1) REVIEW WITH SPECIALIST ADVISERS: if you have a BVI, Jersey, Cayman, or Isle of Man company holding a UK home: seek specialist UK IHT and company law advice on the current position. The FA 2017 change means you are now within UK IHT on the UK residential property value. (2) UNENVELOPE (DE-ENVELOPING): consider transferring the UK property out of the offshore company back to personal ownership. This may involve: SDLT on the transfer (with possible relief under SDLT de-enveloping provisions); CGT on any gain in the company; company tax on the gain. The overall cost of de-enveloping must be weighed against the ongoing ATED (Annual Tax on Enveloped Dwellings) charge and the lack of IHT protection. (3) SELL THE PROPERTY: if the property is to be sold anyway: it may be simpler to sell the UK property within the company (which may have CGT and ATED advantages for the disposal) than to de-envelope first and sell personally. (4) ONGOING REPORTING: ensure ATED returns are filed annually (for UK residential properties held in companies worth above the ATED threshold — currently £500,000); failure to file carries heavy penalties. |
UK assets IHT non-dom 2026. s6 IHTA 1984: excluded property — 'Property situated outside the United Kingdom is excluded property if the person beneficially entitled to it is an individual not domiciled in the United Kingdom (and, from 6 April 2025, not a Long-Term UK Resident under the Finance Act 2025 LTUK test).' LTUK test (FA 2025): from 6 April 2025, the test for worldwide IHT is whether the individual has been UK resident (under the Statutory Residence Test — Finance Act 2013 Sch 45) for at least 10 of the 20 UK tax years preceding the relevant year. If LTUK: worldwide IHT (same as UK-domiciled). If NOT LTUK: IHT on UK-situs assets only (overseas assets = excluded property). Situs of assets: s150-s151 IHTA 1984 — domestic UK situs rules based on common law: land = where situated; shares = country of incorporation; debts = where properly recoverable; tangible movables = where physically located. NRB: s7 IHTA 1984; the threshold at which the IHT rate changes from 0% to 40% on transfers on death. The NRB is £325,000 (frozen until at least 2030 — no indexation). Available to ALL individuals dying in the UK regardless of domicile or LTUK status. RNRB: s8D IHTA 1984 (inserted by Finance Act 2017); available where: (a) the deceased owned a 'qualifying residential interest' (a home they lived in at some point); (b) the QRI passes to direct descendants (lineal descendants: children, grandchildren, step-children, adopted children, and their spouses — s8J IHTA definition). RNRB amount: £175,000 for tax year 2026-27. RNRB taper (s8E IHTA): where the estate value (for a non-LTUK individual: the UK estate only) exceeds £2m: RNRB is reduced by £1 for every £2 above £2m. For most non-LTUK individuals (UK estate only likely below £2m): no taper. Transferable NRB (s8A IHTA) and transferable RNRB (s8G IHTA): transferred from the estate of a deceased spouse/civil partner to the survivor's estate where the NRB/RNRB was unused on the first death. Available to non-LTUK individuals on the same basis as UK-domiciled individuals. Spouse exemption (s18 IHTA): unlimited for transfers to a UK-domiciled or LTUK surviving spouse. The s18(2) cap: if the RECIPIENT spouse is non-UK-domiciled and non-LTUK: the exemption is capped at £325,000 (equal to the NRB). The s267ZA election (IHTA 1984): a non-UK-domiciled/non-LTUK surviving spouse can elect to be treated as UK-domiciled for IHT purposes — removing the £325k cap and allowing the full s18 unlimited exemption; but the election brings the electing spouse's worldwide assets within UK IHT. APR (s116 IHTA): agricultural property relief — 100% relief on agricultural value of qualifying UK agricultural property (farm, farmhouse, agricultural land) — occupied for farming for 2yr (if occupied by the owner) or 7yr (if let). The FA 2026 £1m combined APR+BPR cap applies from 6 April 2026. BPR (s105 IHTA): 100% relief on qualifying business assets (unquoted trading company shares; AIM shares in qualifying trading companies; interests in qualifying trading partnerships). FA 2026 £1m combined cap. ATED: Annual Tax on Enveloped Dwellings — an annual property tax charged on UK residential property held in a company or similar entity; applies to properties worth above the current threshold (£500,000); rates range from approximately £4,150 to £269,450 per annum depending on property value. FA 2017 s48(3A) IHTA: inserted by Finance Act 2017 to close the offshore company IHT avoidance route for UK residential property; applies from 6 April 2017 to interests in non-UK close companies or partnerships deriving value from UK dwellings. Brussels IV (EU Succession Regulation No 650/2012): allows individuals habitually resident in an EU member state to elect the law of their nationality to govern the succession to their estate; post-Brexit the UK does not participate in Brussels IV but a UK choice-of-law clause in the will can achieve a similar result for UK assets. International private law — choice of law for wills: under English private international law (Hague Convention on the Law Applicable to Succession 1989 — not yet in force in UK; Recognition of Trusts Act 1987): a will may designate the governing law for its interpretation and the succession to specific assets. A non-UK national with UK assets should have a UK will drafted by a UK solicitor to cover UK-situs assets specifically.
Frequently Asked Questions
Do non-domiciled people pay inheritance tax on UK assets?
Yes — a non-domiciled or non-Long-Term UK Resident (non-LTUK under Finance Act 2025) individual pays UK IHT on all UK-situs assets at 40% above the available NRB (£325,000). UK-situs assets include: UK land and buildings; shares in UK-incorporated companies (regardless of where the shareholder lives or where the shares are held); UK bank accounts; UK government bonds; debts owed by UK residents. Overseas assets (non-UK land, overseas company shares, foreign bank accounts) are 'excluded property' (s6 IHTA 1984) for a non-LTUK individual — not subject to UK IHT. The full NRB (£325k) and RNRB (up to £175k if the UK home passes to direct descendants) are available to non-LTUK individuals — there is no reduced exemption for non-UK nationals. A non-dom does NOT pay IHT on their overseas assets: only the UK estate is taxable.
What UK assets are subject to IHT for a non-domiciled person?
A non-domiciled (or non-LTUK) individual pays UK IHT on UK-situs assets only: (1) UK land and buildings — all real property physically located in England, Scotland, Wales, or Northern Ireland; (2) shares in UK-incorporated companies — shares in any company formed under UK law (London Stock Exchange listed shares, AIM shares, private UK company shares), even if held by an overseas broker or nominee; (3) UK bank accounts — accounts at UK banks or UK branches of foreign banks; (4) UK government gilts; (5) debts owed by UK residents. Overseas assets of a non-LTUK individual are excluded property (s6 IHTA 1984): French bank accounts, Spanish property, Italian shares, US investments — all excluded from UK IHT. From FA 2025: the 'non-dom' test for IHT is replaced by the LTUK test — 10 of the last 20 UK tax years UK resident = LTUK; worldwide IHT. Fewer than 10yr UK resident = not LTUK; UK assets only.
Is the nil-rate band available to non-domiciled people for UK inheritance tax?
Yes — the FULL NRB (£325,000 as of 2026) is available to every individual dying in the UK regardless of domicile or LTUK status. There is no reduction in the NRB for non-domiciled or non-LTUK individuals. The RNRB (Residence Nil-Rate Band — up to £175,000) is also available if a qualifying residential interest (a UK home the deceased resided in) passes to direct descendants. The transferred NRB (tNRB — s8A IHTA) is available if the deceased's spouse/civil partner predeceased them with their NRB unused. Combined NRB + tNRB = up to £650,000; plus RNRB + tRNRB = up to £350,000; total up to £1,000,000 for a married couple where the UK home passes to children. Example: non-dom individual with £900k UK estate + £650k combined NRB: taxable UK estate = £250k; IHT = £100k (11.1% effective rate on the UK estate).
Does an offshore company protect UK property from inheritance tax?
No — not since Finance Act 2017. Before 6 April 2017, holding UK residential property via an offshore close company (BVI, Jersey, Cayman, Isle of Man etc.) was a common IHT planning structure for non-doms: the shares in the offshore company were non-UK-situs (excluded property) — so no UK IHT on the UK home for a non-LTUK individual. Finance Act 2017 inserted s48(3A) IHTA 1984: from 6 April 2017, an interest in a non-UK close company or partnership whose value derives from a UK dwelling is treated as a UK residential property interest — NOT excluded property. The UK land inside the offshore company is looked through for IHT purposes. The offshore structure provides no IHT protection for UK residential property. Review any existing structure with specialist advisers — consider de-enveloping, the ATED charges, and the overall tax position.
Does a non-domiciled person need a UK will?
Yes — and it is essential. A non-domiciled or non-LTUK individual owning UK property, UK shares, or UK bank accounts has assets within the scope of UK law on death. Without a UK will: the UK estate is distributed under UK intestacy rules (Administration of Estates Act 1925 in England and Wales), which may conflict with the individual's wishes and their home country's laws. A UK will: (1) appoints UK executors (persons or professionals who can administer the UK estate and deal with UK IHT); (2) specifies who inherits UK assets; (3) can include IHT planning provisions (NRB trust; charitable legacy for 36% rate; etc.); (4) can include a Brussels IV choice of law election (electing UK succession law to govern UK assets — or their nationality's law if preferred); (5) avoids costly and slow Letters of Administration proceedings on intestacy. A coordinated UK will (covering UK assets) and a home country will (covering overseas assets) is the standard recommendation for international estates — with careful drafting to ensure the wills do not inadvertently revoke each other.
A UK Will Is Essential for Every Non-UK National With UK Assets
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