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The April 2025 non-dom IHT reforms fundamentally change when non-UK domiciled individuals face IHT on their worldwide assets. The residency-based system lowers the threshold to 10 years and extends the tail period — catching many more long-term UK residents in the worldwide IHT net.
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This guide is a companion to our broader guide on non-dom IHT reforms 2025. Both guides cover the same reform from different angles — this guide focuses on who is affected and what the practical differences are; the companion guide covers planning options in more depth.
Under the rules that applied before 6 April 2025, a person's IHT liability depended on their domicile — broadly, the country they considered their permanent home. Key features of the old system:
Many high-net-worth international individuals resident in the UK for fewer than 15 years legally avoided UK IHT on non-UK assets — using the non-dom status as part of their overall tax planning.
From 6 April 2025, IHT is based on residence rather than domicile:
The key group newly caught by the change are those who had been UK resident for 10–14 years before April 2025. Under the old rules, they had not yet reached the 15-year deemed domicile threshold. Under the new rules, they became long-term UK residents on 6 April 2025 — subject to worldwide IHT from that date.
For such individuals, the change meant an immediate shift from paying IHT only on UK assets to paying IHT on worldwide assets — with no transition period.
Even for short-term UK residents (under 10 years), UK-situs assets have always been within the UK IHT net. "UK-situs" assets include:
Assets outside the UK — overseas property, foreign bank accounts, non-UK listed shares — are outside the IHT net until the long-term resident threshold is crossed.
Excluded property trusts (EPTs) were a widely used planning structure for non-doms — settling non-UK assets into trust before becoming deemed domiciled locked in the excluded property status indefinitely.
The transitional position for EPTs settled before 6 April 2025 is complex. In broad terms, the protection afforded by pre-existing EPTs depends on when they were settled relative to the settlor's IHT status at the time. Some trusts will retain excluded property status; others may lose it. Specialist advice is essential for anyone with an existing EPT.
New trusts settled after 6 April 2025 by long-term UK residents cannot achieve excluded property status — the assets will be in the IHT net.
The standard UK IHT planning toolkit is now available (and relevant) to long-term UK residents:
If a UK-domiciled (or long-term resident) person is married to a non-UK-domiciled person who is not a long-term resident, the spousal exemption is capped rather than unlimited. Under the 2025 rules, the cap for lifetime transfers from a UK-domiciled/long-term-resident to a non-long-term-resident non-dom spouse is £325,000 (the NRB level) per person per lifetime.
An election can be made for the non-dom spouse to be treated as a long-term UK resident for IHT purposes — which removes the cap on the spousal exemption but brings their worldwide assets into the UK IHT net. The election is irrevocable while both are UK resident.
The non-dom IHT regime changes from April 2025. The new 10-year resident rule means long-term UK residents face IHT on worldwide assets. What you need to know.
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APR changes from April 2026 cap full relief at £2.5m combined with BPR. Essential reading for farmers, landowners, and rural estate planners.
AIM shares lose 100% BPR from April 2026, dropping to 50% relief. What it means for AIM IHT portfolios, existing holdings, and alternatives to consider.
From April 2027, unspent pension funds fall into your taxable estate. Worked examples show the impact and the planning steps that can still reduce the bill.
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