The UK moved from a domicile-based system to a residence-based system for Inheritance Tax. Previously, IHT exposure on overseas assets was governed by domicile, a long-term legal concept based on where you considered your permanent home. From 6 April 2025, the key test is long-term UK residence: 10 or more years of UK residence in the previous 20 years brings worldwide assets into scope. Domicile may still be relevant in transitional cases.

The Foreign Income and Gains (FIG) regime applies to individuals who become UK-resident after at least 10 consecutive years of non-UK residence. For their first 4 tax years of UK residence, foreign income and gains are not subject to UK income tax or CGT. After 4 years, foreign income and gains are taxed in the UK in the normal way. The FIG regime covers income tax and CGT only, it does not affect IHT exposure.

An Excluded Property Trust (EPT) is a trust established by a non-UK domiciled individual before becoming a UK long-term resident. Non-UK assets settled into the trust remain outside the UK IHT estate permanently even after the settlor subsequently becomes a UK long-term resident. The trust must be established before the 10-year threshold is reached. After April 2025, new trusts are subject to tighter rules. Professional advice is essential before any structure is created.

For IHT, former long-term UK residents remain within the UK IHT regime for between 3 and 10 years after leaving, depending on how many years they were UK-resident. For CGT, the temporary non-residence rules apply for 5 years. Gains on assets owned before departure can be taxed on return. The exact period depends on individual circumstances and should be calculated professionally before any departure.

No, not on its own. For UK long-term residents, the location of an asset is irrelevant for UK IHT purposes. Overseas property, foreign bank accounts, and overseas investments are all included in the UK taxable estate if the owner is a UK long-term resident. Moving assets does not remove them from scope. Legitimate planning through trust structures established at the right time, or planning the timing of UK departure is required.

Yes. A UK will governs UK-situated assets. For overseas assets, a separate will in each relevant jurisdiction is usually advisable. Many countries do not recognise or automatically apply a UK will to local assets. The interaction between your UK will, overseas succession rules, and the IHT treatment of worldwide assets must be reviewed together as part of a coordinated estate plan.

The Statutory Residence Test (SRT) is the legal framework HMRC uses to determine whether you are UK-resident in a given tax year. It is based on the number of days spent in the UK, the number of UK ties you have (family, work, accommodation, past visits), and whether you meet automatic overseas residence or automatic UK residence conditions. UK residence is assessed year by year, a single year of inadvertent residence can restart the IHT clock.

Yes, in some circumstances. A Family Investment Company (FIC) can be used to hold and grow wealth in a corporate structure, with future growth accruing outside the founder's estate through the next generation's shareholdings. For internationally mobile families, the FIC must be structured with awareness of both UK and overseas tax rules Particularly the residence and domicile rules that affect whether the FIC itself falls within UK IHT. Professional advice across both jurisdictions is essential.

The simplest first step is a free initial conversation with a Bluebond specialist, or download the free International Tax Guide below. We review your residence history, overseas asset position, IHT exposure, and income tax situation. We will identify where exposure exists and which strategies apply. No obligation, no charge for the initial consultation.

Yes, if you are a UK long-term resident. Since April 2025, UK Inheritance Tax is no longer based on domicile — it is based on long-term residence. If you have been UK-resident for at least 10 of the previous 20 tax years, your entire worldwide estate including overseas property, bank accounts, and investments is subject to UK IHT at 40% above available allowances.

Yes, UK inheritance tax applies to UK-situated assets (such as UK property, UK bank accounts, and UK shares) regardless of your long-term residency or residency status. However, your worldwide assets won't be subject to UK inheritance tax as long as you remain non-UK long-term resident.

If you're UK long-term resident, your foreign property is subject to UK inheritance tax as part of your worldwide estate. However, the foreign country may also charge inheritance or estate tax, potentially causing double taxation. Double taxation relief may be available depending on tax treaties between the UK and that country.

Consider establishing excluded property trusts before becoming long-term resident in the UK, review your long-term residency status and whether you can maintain long-term residency, plan the timing and structure of asset holdings, and take advantage of the first 10 years before long-term residency rules apply.
Specialist advice is essential before returning.

For UK long-term resident individuals, inheritance tax applies to worldwide assets. For non-UK long-term resident individuals, inheritance tax generally only applies to UK assets, though this can change if they become long-term resident. 

UK inheritance tax liability depends on long-term residency status. If you're long-term resident in the UK, you're liable on worldwide assets, even if you have recently become non-resident. If you're not UK long-term resident, you're generally only liable on UK assets.

Your liability depends on your long-term residency status. If you're UK long-term resident (even living abroad), UK inheritance tax applies to your worldwide assets. If you're not UK long-term resident, you're only taxed on UK-situated assets.
Consider professional advice on your long-term residency status.