Estate Planning for British Expats

How does UK inheritance tax work for expats?

It depends on where your assets sit and how long you have been resident. If HMRC treats you as based abroad, UK inheritance tax is generally paid only on your UK assets, such as a UK property or UK bank account. HMRC treats you as based abroad where you have lived in the UK for fewer than 10 of the last 20 years (gov.uk, as at July 2026, subject to change).

The tax-free bands still apply to an expat estate that is in scope. The ordinary nil-rate band is £325,000 per person, with an extra residence nil-rate band of up to £175,000 where a home passes to children or grandchildren, and the standard rate on the excess is 40% (gov.uk, as at July 2026, subject to change). These bands are frozen until the end of the 2030-31 tax year (5 April 2031) (gov.uk, as at July 2026, subject to change). For how the bands and rate work in general, see our Inheritance Tax Explained guide.

UK assets versus overseas assets

The split matters more than a passport. Where you are treated as based abroad, UK inheritance tax is generally charged only on UK-situated assets, for example a house or a bank account in the UK, and not on your overseas assets (gov.uk, as at July 2026, subject to change). Some overseas holdings are also treated as excluded assets and fall outside the charge.

Assets that gov.uk lists as excluded include foreign currency accounts with a bank or the Post Office, overseas pensions, and holdings in authorised unit trusts and open-ended investment companies, so these may sit outside UK inheritance tax for someone based abroad (gov.uk, as at July 2026, subject to change). The position can change once the long-term resident rules apply, so it is worth checking each asset.

For overseas holdings in more detail, see our note on inheritance tax on foreign assets.

The long-term UK resident rules from April 2025

From 6 April 2025 the old domicile and deemed-domicile tests were replaced for inheritance tax by a residence-based test. A person is generally a long-term UK resident, and so within the charge on their worldwide assets, if they have been UK tax resident for at least 10 of the previous 20 tax years (gov.uk, as at July 2026, subject to change). This is a significant shift for expats who spent many years in the UK before leaving.

Leaving the UK does not end that status at once. Someone who has been a long-term UK resident can remain in scope for their overseas assets for a period after departure, ranging broadly from three to ten years depending on how many of the last 20 tax years were spent in the UK (gov.uk, as at July 2026, subject to change). During that tail, overseas assets may still be caught, so timing can matter a great deal. For how the older concept still surfaces, see our guide to domicile and inheritance tax.

A worked example (illustration only). Suppose someone moved from the UK to Spain in 2024 after 18 years living in Britain. Because they were UK tax resident for at least 10 of the previous 20 tax years, they would generally count as a long-term UK resident, so their worldwide estate could stay within UK inheritance tax for a number of years after leaving (gov.uk, as at July 2026, subject to change). Their UK flat, worth £400,000, would remain in scope in any case (gov.uk, as at July 2026, subject to change). Change the years of residence, the country or the assets and the answer changes, so this is general information rather than a calculation for any real estate.

Wills and where they apply

One will may not be enough once you own assets in more than one country. A UK will can deal with UK assets, but a foreign property is usually governed by the succession law of the country where it sits, which can override what an English will says (gov.uk, as at July 2026, subject to change). Some countries apply forced-heirship rules that reserve fixed shares for children, unlike England and Wales.

Many people who live abroad choose to hold a will in each relevant country, carefully drafted so the two do not accidentally revoke one another. This is an area where cross-border advice matters, because the interaction of two legal systems is easy to get wrong. It can be worth discussing your position with a solicitor or a STEP practitioner who handles international estates before making or updating a will.

UK assets. A UK will can cover UK property, accounts and investments in the usual way.

Overseas property. Local succession law often applies, and may reserve shares for particular relatives.

Revocation risk. A later will in one country can unintentionally cancel an earlier will elsewhere, so drafting needs care.

Being taxed twice, and double taxation relief

An expat estate can face a tax charge in two countries on the same asset. Where both the UK and the country you lived in charge inheritance or estate tax on the same property, your executor may be able to reclaim some of it under a double taxation convention, and the UK has several bilateral treaties covering estates, gifts and inheritances (gov.uk, as at July 2026, subject to change). Where no treaty exists, unilateral relief may still apply in some cases, so the detail matters.

These reliefs are technical and depend on the specific country and asset. Because getting a claim right often needs professional input on both sides of the border, it can be worth taking advice from a qualified professional who handles cross-border estates rather than relying on general reading.

Expats and the different UK nations

Inheritance tax is a UK-wide tax, so the £325,000 nil-rate band, the residence nil-rate band and the 40% rate apply across England, Wales, Scotland and Northern Ireland alike (gov.uk, as at July 2026, subject to change). What differs is the surrounding succession law. Scotland has its own rules, including legal rights that can give a spouse and children a fixed share, and it uses confirmation rather than a grant of probate. For a British expat with a home or roots in Scotland or Northern Ireland, it can be worth taking advice in the relevant nation as well as abroad.

Frequently asked questions

Do British expats still pay UK inheritance tax?

Often, yes, at least on UK assets. Where HMRC treats you as based abroad, UK inheritance tax is generally charged only on UK-situated assets such as a UK home or bank account (gov.uk, as at July 2026, subject to change). If you count as a long-term UK resident, your worldwide assets can also be in scope for a period, depending on circumstances.

When does HMRC treat me as based abroad?

Broadly, when your UK residence history is limited. HMRC generally treats you as based abroad for inheritance tax where you have lived in the UK for fewer than 10 of the last 20 years (gov.uk, as at July 2026, subject to change). The separate long-term UK resident test, in place from 6 April 2025, can still bring overseas assets into charge, so both need checking.

What are the long-term UK resident rules?

From 6 April 2025 these replaced the old domicile tests for inheritance tax. A person is generally a long-term UK resident, and so in scope on worldwide assets, if UK tax resident for at least 10 of the previous 20 tax years, remaining in scope for roughly three to ten years after leaving (gov.uk, as at July 2026, subject to change). The exact tail depends on your residence history.

Are my overseas assets safe from UK inheritance tax?

Not always. Where you are treated as based abroad, overseas assets are generally outside UK inheritance tax, and some, such as overseas pensions and foreign currency bank accounts, are listed as excluded assets (gov.uk, as at July 2026, subject to change). If the long-term resident rules apply, worldwide assets can be caught, so the answer depends on your circumstances.

Do I need a will in each country?

Many expats choose to. A UK will can cover UK assets, but overseas property is usually governed by the succession law where it sits, which can differ sharply from England and Wales (gov.uk, as at July 2026, subject to change). Because a later will in one country can accidentally revoke an earlier one elsewhere, this is one area where cross-border advice is often worthwhile.

Can I be taxed twice on the same estate?

It can happen where two countries tax the same asset. Your executor may be able to reclaim tax under a double taxation convention, and the UK holds several treaties covering estates and inheritances (gov.uk, as at July 2026, subject to change). Because these claims are technical and country-specific, many people take advice from a professional who handles international estates.

About Fairchild Oldfield

The Fairchild Oldfield team brings together estate planning, tax, independent financial advice and client care, working with families across England and Wales.

Fairchild Oldfield are estate planning specialists and will writers, not a firm of solicitors. This article is general information based on practical experience, not legal, tax or financial advice.

Important: This article is general information only and is not legal, tax or financial advice. Reading it does not create a professional relationship. It is based on the law of England and Wales, and other UK jurisdictions and overseas countries may differ. Figures and rules are current as at July 2026 and are subject to change. Before acting, many people choose to seek advice from a suitably qualified professional, such as a solicitor, a STEP practitioner, an accountant, or an FCA-authorised financial adviser, who can consider your individual circumstances.