UK Expat Estate Planning 2026 -- Wills, Trusts and Cross-Border Tax

Last reviewed: 26 April 2026

UK expat estate planning requires simultaneous management of UK Inheritance Tax (IHT), the law of the country of residence, and the cross-border validity of wills and trusts that may govern assets in multiple jurisdictions. Many British nationals who leave the UK assume that estate planning ceases to be a UK concern once they establish non-UK-residence; this is incorrect. UK IHT has historically been based on domicile -- and under the Finance Act 2025 reforms (effective 6 April 2025), a new residence-based IHT charge applies to "long-term residents" who have been UK-resident in at least 10 of the prior 20 tax years. UK expats who meet this threshold remain within UK IHT on their worldwide estate for a "tail period" of up to 10 years after leaving the UK. For the UK tax residency framework that determines the IHT tail period, see our UK tax residency guide. For the investment and asset structures that interact with estate planning, see our UK expat investments guide.

Effective UK expat estate planning requires a coordinated approach involving a UK-qualified solicitor (SRA-regulated, listed at sra.org.uk) and, for cross-border estates, a specialist with dual qualification or STEP (Society of Trust and Estate Practitioners) membership. STEP (step.org) is the global professional body for trust and estate practitioners; STEP members are qualified to advise on multi-jurisdictional estate planning involving UK and foreign assets. HMRC’s Inheritance Tax Manual (IHTM) at gov.uk sets out the full UK IHT rules, including the non-resident and domicile provisions; the Finance Act 2025 amendments are incorporated in HMRC’s updated guidance for the 2025/26 tax year. Specialist UK IHT planning advice is not optional for UK nationals with estates above the nil-rate band who have spent significant time in the UK.

UK Inheritance Tax: the nil-rate band and 40% rate

UK Inheritance Tax (IHT) is charged at 40% on the value of an estate above the available nil-rate band (NRB). The NRB for 2025/26 is £325,000 per individual, frozen at that level until at least 2030 per HMRC’s published IHT thresholds (gov.uk/inheritance-tax). The Residence Nil-Rate Band (RNRB) provides an additional £175,000 exemption where a residential property is left to direct descendants (children or grandchildren); the RNRB is tapered for estates above £2 million. Married couples and civil partners can transfer the unused NRB to the surviving spouse, giving a combined IHT-free threshold of up to £650,000 (or £1 million including the maximum RNRB). Gifts made more than 7 years before death are outside the estate for IHT purposes under the Potentially Exempt Transfer (PET) rules (Inheritance Tax Act 1984, s.3A); gifts within 7 years use a taper relief scale reducing from 40% (0-3 years) to 8% (6-7 years). Charitable gifts are fully IHT-exempt; a reduced rate of 36% applies where 10% or more of the net estate is left to charity (Finance Act 2012 amendment to IHTA 1984).

Finance Act 2025: the long-term resident IHT test

Finance Act 2025 (effective 6 April 2025) replaced the former domicile-based IHT charge with a residence-based "long-term resident" test for determining worldwide estate IHT exposure for non-UK-domiciled individuals. Under the new rules, a person is a "long-term UK resident" -- and therefore subject to UK IHT on their worldwide estate -- if they have been UK-resident (under the Statutory Residence Test) in at least 10 of the prior 20 tax years. Once classified as a long-term resident, the IHT exposure continues during a "tail period" after leaving the UK: the tail period is equal to the number of qualifying years above 10 (capped at 10 years), meaning a person who has been UK-resident for 20 consecutive years has a 10-year IHT tail after departure. HMRC’s IHTM guidance updated for Finance Act 2025 sets out the transitional rules for individuals who left the UK before 6 April 2025 under the former domicile regime. UK nationals who left the UK after that date are assessed under the new long-term resident test from the outset of their departure.

The practical impact of the Finance Act 2025 changes on UK expat estate planning is significant: UK nationals who have lived and worked in the UK for most of their adult lives before emigrating (for example, those who leave at age 50-60 after 30+ years of UK residency) will typically be long-term residents with the maximum 10-year IHT tail period. During this tail, their worldwide estate (UK and foreign assets combined) is within UK IHT at 40% above available exemptions. Strategies to reduce IHT during the tail period include: lifetime gifting (using the annual exemption of £3,000 per year, small gifts exemption of £250 per recipient per year, and normal expenditure out of income exemption under IHTA 1984 s.21); Business Property Relief (BPR) investment; agricultural property relief where applicable; and trust structures (discretionary trusts, interest in possession trusts) which may provide IHT planning benefits where properly established before the charge arises. All of these strategies require specialist legal and tax advice.

Cross-border wills: validity and EU Regulation 650/2012

A UK will (made under the Wills Act 1837 as amended) governs the distribution of the testator’s estate in England and Wales under UK law. However, a UK will does not automatically govern assets in foreign jurisdictions; the validity and effect of a UK will in a foreign country depends on that country’s private international law rules. In EU member states, EU Regulation 650/2012 (Brussels IV) -- which became directly applicable in all EU member states (except Denmark) from 17 August 2015 -- determines the law applicable to succession. Under Brussels IV, a deceased’s estate in an EU member state is governed by the law of the state in which the deceased was habitually resident at the date of death, unless the deceased made a valid "choice of law" declaration selecting the law of their nationality (the UK). UK nationals resident in EU member states (Spain, Portugal, France, Germany) who do not make a Brussels IV choice of law declaration may find their EU-sited assets governed by the local succession law of their EU country of residence rather than by their UK will.

For UK nationals resident in non-EU countries (UAE, Singapore, Australia, USA), the applicable law for succession of locally sited assets is determined by the private international law rules of each country individually. The UAE applies local succession law (Federal Personal Status Law No. 28/2005) for UAE-sited assets of Muslim decedents; non-Muslim foreigners may register a will with the DIFC Wills Service Centre or the Abu Dhabi Judicial Department (ADJD) under English common law principles for UAE-sited assets, which will be executed according to the will’s terms. The Hague Convention on the Law Applicable to Succession (1989) is not widely ratified; professional guidance from a lawyer qualified in each relevant jurisdiction is essential for UK expats with assets in multiple countries. STEP’s membership directory at step.org allows identification of practitioners with relevant multi-jurisdictional qualifications.

Trusts for UK expat estate planning

Trusts are a central tool in UK expat estate planning, particularly for managing assets across multiple jurisdictions and reducing UK IHT exposure over the long-term resident tail period. The principal trust types used in UK expat planning include: Discretionary Trusts (where trustees have full discretion over distributions to the beneficiary class; assets settled into a discretionary trust during the settlor’s lifetime are potentially exempt from IHT after 7 years from settlement, subject to the entry charge at 20% and 10-yearly periodic charges at up to 6% under IHTA 1984 ss.58-70); Interest in Possession Trusts (where a named beneficiary has a right to income; the trust asset is included in the income beneficiary’s estate for IHT purposes); and Bare Trusts (where assets are held for an absolutely entitled beneficiary; treated as the beneficiary’s own property for tax purposes). The Finance Act 2025 introduced new rules on the IHT treatment of offshore trusts settled by long-term UK residents; trusts settled before 6 April 2025 may have grandfathering provisions that preserve the pre-reform treatment.

Business Property Relief and investment planning

Business Property Relief (BPR) exempts qualifying business assets from IHT at 100% (for unquoted shares and interests in a business) or 50% (for quoted shares in a company where the transferor controls the company, or for land/buildings/machinery used by a business) after a minimum 2-year qualifying ownership period. BPR is available to UK IHT-chargeable estates regardless of the owner’s country of residence; UK expats who are long-term residents subject to UK IHT on worldwide assets can claim BPR on qualifying UK business assets (including AIM-listed shares that meet the BPR qualifying conditions, investments in EIS companies, and stakes in qualifying unlisted trading companies). HMRC’s BPR guidance in the IHTM (IHTM25000 series) sets out the qualifying conditions; the key requirement is that the business must be a qualifying trading business (not a business wholly or mainly dealing in land, investments, or securities). BPR is not available for investment properties, cash deposits, or listed equity portfolios, making it specifically applicable to higher-risk business assets and structures such as EIS and AIM portfolios. As discussed in our UK expat investments guide, EIS investments that meet BPR conditions provide both income tax relief (30%) and IHT exemption after 2 years -- a powerful combined relief for UK expats with UK income tax liability and IHT exposure.

Appointing executors and trustees: cross-border considerations

A UK will must appoint at least one executor to administer the UK estate through probate. For UK expat estates, the choice of executor involves cross-border practical considerations: if the testator dies abroad, the executor must obtain a UK Grant of Probate (or Letters of Administration if there is no will) from the HMCTS Probate Registry; the grant allows the executor to access and distribute UK assets. For estates with assets in multiple countries, the UK probate grant does not automatically have effect in foreign jurisdictions; an Apostille (issued by the UK Foreign Commonwealth and Development Office under the Hague Convention of 1961) is required to legalise the UK grant for use in countries that are Hague Convention signatories. Some countries (UAE, Saudi Arabia, Qatar) require additional notarisation and Arabic translation of all foreign estate documents before local courts will act on them. Appointing a professional executor (a UK solicitor, a trust corporation, or a specialist probate service) alongside a family executor is strongly recommended for UK expat estates with international assets, to ensure professional management of the probate process from wherever the testator dies.

UK domicile, the long-term resident tail and the IHT planning window

UK nationals who leave the UK and do not become long-term residents (i.e., those with fewer than 10 qualifying years of UK residency in the prior 20) are outside the UK IHT charge on their worldwide estate (though UK-sited assets remain taxable in the UK under the property-based IHT charge regardless of the owner’s domicile or residence). For long-term residents who are within the IHT tail after leaving the UK, the key planning priority is reducing the taxable estate during the tail period -- the window between leaving the UK and the end of the 10-year tail (or shorter, depending on years above 10). Strategies used in this window include: trusts settled before leaving (trust assets may fall outside the estate after 7 years from settlement, even if the settlor remains within the IHT tail on personal assets); lifetime gifts (PETs running the 7-year clock from the date of gift); and restructuring assets into BPR-qualifying business property. Any planning executed during the IHT tail period should be done with specialist UK IHT advice; the SRA Find a Solicitor tool at sra.org.uk is the authoritative directory of UK-regulated solicitors, including those with IHT and cross-border estate planning expertise.

This article is for general information only and does not constitute tax, legal, financial or immigration advice. Rules and rates change; verify with the primary sources cited or consult a qualified adviser before acting.

FAQ

Does UK Inheritance Tax apply to UK expats living abroad?

UK IHT applies to worldwide estates of "long-term UK residents" under the Finance Act 2025 rules (effective 6 April 2025): those who have been UK-resident for at least 10 of the prior 20 tax years. During the tail period (up to 10 years after leaving the UK), the worldwide estate remains subject to UK IHT at 40% above the available nil-rate band (£325,000 in 2025/26). UK-sited assets are always subject to UK IHT regardless of the owner’s residence or domicile. Non-long-term-residents are not subject to IHT on foreign assets.

What is Business Property Relief and how can expats use it?

Business Property Relief (BPR) exempts qualifying business assets (unquoted shares, interests in trading businesses, qualifying AIM shares) from UK IHT at 100% after a minimum 2-year qualifying ownership period. BPR is available regardless of the owner’s country of residence, making it a key IHT mitigation tool for UK expats within the IHT long-term resident tail. Investment properties, cash, and listed equity portfolios do not qualify. EIS investments and qualifying AIM-listed shares are commonly used for BPR planning. HMRC’s IHTM25000 series is the authoritative source.

Is a UK will valid in other countries?

A UK will governs UK-sited assets under English law, but does not automatically govern assets in foreign jurisdictions. In EU member states, EU Regulation 650/2012 (Brussels IV) determines which country’s law governs succession; UK nationals habitually resident in an EU state should make a Brussels IV choice of law declaration selecting UK law in their will. Non-EU countries have their own succession law rules. Specialist legal advice from a qualified practitioner in each country is essential for expats with multi-jurisdiction assets.

What is the Finance Act 2025 IHT long-term resident rule?

From 6 April 2025, Finance Act 2025 replaced the domicile-based IHT charge with a residence-based test: individuals who have been UK-resident for at least 10 of the prior 20 tax years are "long-term residents" subject to UK IHT on their worldwide estate. The IHT tail period after departure equals the number of qualifying years above 10 (capped at 10 years). HMRC’s updated IHTM guidance sets out the transitional provisions for individuals who left before 6 April 2025.

What are the IHT implications of setting up a trust as a UK expat?

Assets settled into a discretionary trust by a UK IHT-chargeable settlor are subject to a 20% entry charge on the value above the nil-rate band at the time of settlement; after 7 years, the trust assets are outside the settlor’s estate for IHT. Discretionary trusts are subject to a 10-yearly periodic charge at up to 6% (IHTA 1984 ss.58-70) and exit charges on distributions. Finance Act 2025 introduced new rules on offshore trusts settled by long-term residents; specialist advice from a STEP-qualified practitioner is essential before establishing a trust for IHT planning purposes.

How do I find a qualified solicitor for UK expat estate planning?

The Solicitors Regulation Authority (SRA) Find a Solicitor tool at sra.org.uk allows searches by specialism, including Wills, Trusts, and Probate, and International Law. STEP (Society of Trust and Estate Practitioners, step.org) maintains a directory of qualified trust and estate practitioners globally; STEP members typically hold the STEP diploma or equivalent and are experienced in multi-jurisdictional estate planning. For cross-border estates involving EU succession law, a STEP-qualified practitioner with EU member state qualification or referral network is recommended.

Sources

1. HMRC -- Inheritance Tax Manual (IHTM) (verified 26 April 2026)
2. GOV.UK -- Inheritance Tax rates and thresholds (verified 26 April 2026)
3. Inheritance Tax Act 1984 (legislation.gov.uk) (verified 26 April 2026)
4. STEP -- Society of Trust and Estate Practitioners practitioner directory (verified 26 April 2026)
5. SRA -- Find a Solicitor (Wills, Trusts, Probate, International) (verified 26 April 2026)