Residence replaced the former domicile basis
Overseas Assets and UK Residence
From 6 April 2025, long-term UK residence can bring overseas assets within the UK Inheritance Tax net.
General education, not personal financial, legal or tax advice.
The 10-out-of-20 test
An individual is generally a long-term UK resident where they were UK tax resident for at least 10 of the previous 20 tax years. When that test is met, overseas assets owned outright can be within IHT on a lifetime transfer or death.
Leaving the UK does not switch exposure off immediately
A former long-term resident can remain within scope for between three and ten tax years after leaving, depending on their residence history. Ten consecutive years of non-residence can reset the residence count for a later return.
Trusts and transitional rules are specialist territory
The treatment of overseas trust assets depends on when property was settled, residence history, the asset’s location and transitional protection. Double-tax conventions and common-law domicile can remain relevant in particular contexts.
Record tax residence year by year, asset locations, trust additions and major transfers. Cross-border advice should normally involve a specialist UK tax adviser and, where appropriate, advice in the other jurisdiction.
Direct answers
Frequently asked questions
When can overseas assets fall within UK Inheritance Tax?
From 6 April 2025, the scope is principally residence-based. Long-term UK residents can be within scope on worldwide assets, subject to detailed rules and treaty considerations.
What is a long-term UK resident for Inheritance Tax?
Broadly, it is a person who has been UK resident for at least 10 out of the previous 20 tax years, with special rules for years after leaving the UK.