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It depends on your residence history, not on where you consider home. Since 6 April 2025 UK inheritance tax has been decided by a residence test rather than by domicile: if you were UK resident for at least 10 of the previous 20 tax years you are a “long-term UK resident”, and your worldwide estate is in scope. If you were not, only your UK-situated assets are. Moving abroad starts a clock, but the clock runs for between three and ten tax years depending on how long you were here.
For decades, UK inheritance tax was decided by domicile: a legal concept about where you consider your permanent home. If you look for guidance on this online, a great deal of what you will find still describes that system, including the “15 of the last 20 years” deemed domicile rule. It no longer governs inheritance tax.
For transfers and deaths on or after 6 April 2025, the scope of UK inheritance tax turns on whether a person is a long-term UK resident. Section 6A of the Inheritance Tax Act 1984 puts it plainly: “an individual is a ‘long-term UK resident’ at all times in a tax year if they were UK resident for at least 10 of the previous 20 tax years”. Residence here means residence under the statutory residence test — the same test that decides your income tax position — rather than a judgement about your intentions.
The consequence is unchanged in shape. A long-term UK resident's entire worldwide estate is within scope, taxed at 40% above the nil-rate band of £325,000. For someone who is not a long-term UK resident, section 6 makes property situated outside the United Kingdom excluded property, so only UK-situated assets are caught. What changed is how you find out which side of the line you are on: it is now a matter of counting tax years, not of arguing about intention.
Deaths before 6 April 2025
If you are administering an estate where the death occurred on or before 5 April 2025, the old domicile and deemed domicile rules still apply to it. The sections below on domicile of origin and domicile of choice are written for that case, and for the other purposes — principally succession law, which decides whose law governs your will — for which domicile still matters.
Use our IHT calculator to estimate the potential inheritance tax liability on your estate under different domicile scenarios.
Everyone is born with a domicile of origin. For most purposes this is the country where their father was domiciled at the time of their birth. If your father was domiciled in England and Wales when you were born, your domicile of origin is England and Wales. If he was domiciled in Scotland, your domicile of origin is Scotland. Children born outside marriage generally take the domicile of their mother.
The domicile of origin is remarkably tenacious. It does not disappear simply because you leave the UK — it is merely displaced if you acquire a domicile of choice elsewhere. Critically, if you ever lose a domicile of choice (for example, you leave your adopted country without settling permanently in another) your domicile of origin automatically revives. This is known as the “domicile bounce” and it catches many expats who move between countries thinking they have left their UK domicile behind permanently.
Example of domicile bounce
Sophie is born in England (domicile of origin: England and Wales). She moves to France in 2005 and acquires a French domicile of choice. In 2018 she moves to Singapore for work on a two-year contract. She never forms the intention to remain in Singapore permanently, so she does not acquire a Singaporean domicile of choice. At this point, her French domicile of choice is abandoned and her English domicile of origin revives automatically — even though she has not lived in England for over a decade.
To acquire a domicile of choice in another country, you must satisfy two requirements simultaneously: you must be physically resident in that country, and you must intend to reside there permanently or indefinitely. Crucially, “permanently or indefinitely” does not mean “forever” — it means you have no present intention to leave. But it must be a genuine settled intention, not simply a preference or hope.
HMRC and the courts look at a wide range of evidence to assess whether a domicile of choice has genuinely been acquired:
Courts have regularly rejected claimed domicile changes in cases where the person maintained a UK home, kept a British-law will, returned to the UK frequently, or expressed any intention to “possibly return one day”. The standard of proof is high because the stakes — the entire worldwide estate — are substantial. HMRC investigations into domicile are common and can be expensive and distressing for executors to deal with after death.
Important
For inheritance tax, none of this decides the question any more. All of it still matters for a death on or before 5 April 2025, and for working out which country's succession law applies to your will. But if you are asking whether UK inheritance tax reaches your overseas assets on a death today, the answer comes from counting tax years of residence, not from weighing evidence of intention.
Section 6A(1) sets the entry test: you are a long-term UK resident at all times in a tax year if you were UK resident for at least 10 of the previous 20 tax years. The 20-year window moves with you — each tax year that passes is a new window — and the count uses UK tax years running 6 April to 5 April.
Section 6A(2) then sets the exit. You are not a long-term UK resident if you were non-UK resident for any 10 consecutive tax years in the 19 years before the current one, or for at least “the required number” of consecutive tax years ending with the previous tax year. The required number depends on how many of the 20 tax years ending with your last UK-resident year you were actually resident here:
| Resident years (of the last 20) | Consecutive non-resident years needed |
|---|---|
| 13 or fewer | 3 |
| 14 | 4 |
| 15 | 5 |
| 16 | 6 |
| 17 | 7 |
| 18 | 8 |
| 19 | 9 |
| 20 | 10 |
Inheritance Tax Act 1984, s.6A(3).
Worked example
James was born in England and lived here his whole life until he moved to Australia in October 2008, and has been non-UK resident ever since. He was UK resident for all 20 of the tax years ending with his last resident year, so his required number is 10. Ten consecutive non-resident tax years took him out of long-term UK resident status well before 2026/27, and only his UK-situated assets are now in scope. Someone who left in 2023 after 20 resident years would still be a long-term UK resident today, with a worldwide estate in scope, and would remain so until ten complete non-resident tax years had passed.
Two refinements worth knowing. Section 6B applies a proportionate version of the test to anyone under 20, replacing “20 tax years” with the number of whole tax years they have been alive and “10” with half that number rounded up; and nobody is a long-term UK resident before their first birthday. And GOV.UK notes a transitional easement: someone who was deemed domiciled on 30 October 2024 loses long-term UK resident status after three years of non-residence.
For a full explanation of how IHT thresholds and rates work once the worldwide estate is in scope, see our UK Inheritance Tax 2026/27 guide.
If you are not a long-term UK resident, section 6 makes your non-UK property excluded property and only your UK-situated assets fall within the scope of UK inheritance tax. The following are generally treated as UK-situated:
Assets generally outside scope include overseas investment accounts, overseas property and shares in non-UK incorporated companies. Section 6(1A) adds holdings in authorised unit trusts and shares in open-ended investment companies, which are excluded property for someone who is not a long-term UK resident even though the funds themselves are UK vehicles. Where an asset sits inside an offshore bond or insurance wrapper, what matters is what the wrapper itself is and where it is situated, which is a question about that particular contract rather than a general rule.
One important exception runs the other way. UK residential property held through an offshore company or partnership has been within the charge since April 2017 under Schedule A1 to the Inheritance Tax Act 1984, and that did not change in 2025: an offshore structure does not take a UK house out of the charge.
If you are an overseas beneficiary dealing with the estate of a UK-deceased person rather than your own planning, see our guide on UK inheritance tax when the deceased was non-resident.
Before 2017, non-domiciled individuals could place overseas assets into an offshore trust and those assets would be treated as “excluded property” — permanently outside the scope of UK IHT even if the settlor later became deemed domiciled. This was a widely used planning tool for wealthy expats and non-domiciles.
The Finance (No. 2) Act 2017 restricted these structures for individuals who became deemed domiciled, and the 2025 reform reset the question again. Since 6 April 2025 the test for whether non-UK trust property is excluded property looks at the settlor's long-term UK residence at the relevant time, rather than at their domicile when the trust was created. That is a change of principle, not a tidying-up: a trust that was permanently outside the net under the old rule can be brought into charge if the settlor is a long-term UK resident. There are transitional protections tied to assets held overseas in trust on 30 October 2024, and HMRC published a separate set of anti-avoidance measures for non-long-term UK residents and trusts in November 2025.
Important
This is the part of the reform where the detail changed most and where the transitional rules are densest. If a trust of this kind is in the picture, the position turns on when it was created, what it held on 30 October 2024, and the settlor's residence history — not on a general rule that can be stated in a paragraph.
Where both spouses are long-term UK residents, the spouse exemption is unlimited — assets passing to a surviving spouse or civil partner on death are entirely free of IHT. The rule is different where their residence status differs.
Section 18(2) now reads that where, immediately before the transfer, the transferor but not their spouse is a long-term UK resident, the exempt value cannot exceed “the exemption limit” — which s.18(2A) defines as the nil-rate band, currently £325,000. Anything above that passing to a spouse who is not a long-term UK resident is taxable at 40%. The cap is the same as it always was; the test for when it applies is now residence rather than domicile.
A statutory election survives the reform in updated form. Under s.267ZC a person who would not otherwise be a long-term UK resident can elect to be treated as one, which lifts the cap. The election can be made by the survivor if at any time in the seven years ending with the election they had a spouse or civil partner who was a long-term UK resident, or by their personal representatives where the deceased was a long-term UK resident and their spouse within the seven years before the death. The trade-off is real: the election brings the electing person's own worldwide estate into scope on their own death.
The reform changes what is worth keeping. Under the old test the valuable material was evidence of intention; under the new one it is evidence of residence.
When someone dies having lived abroad, their executor has to establish and declare the residence position alongside the IHT400. HMRC publishes a dedicated schedule for it — form IHT401a, “Inheritance Tax: long-term United Kingdom (UK) residence” — which replaced the old domicile schedule. The advantage of the new test for executors is that it asks for facts rather than for a judgement about the deceased's state of mind: which tax years the deceased was UK resident for, and how many.
If the executor is also based overseas, managing UK probate from abroad adds a further layer of complexity. See our guide on applying for UK probate when you live abroad for a step-by-step explanation of the process for non-resident executors.
If the deceased was themselves non-resident in the UK, the rules about which assets are taxable and how IHT applies work somewhat differently. Our guide on UK inheritance tax when the deceased was non-resident covers this in detail.
Keep clear records of your residence position throughout your lifetime. The more of that your executor has to hand, the more quickly they can complete IHT401a and settle the scope of the estate.
On these facts, almost certainly not. Since 6 April 2025 the question is whether you were UK resident for at least 10 of the previous 20 tax years. Twenty-five years of Australian residence means none of the last 20 tax years were UK resident, so you are not a long-term UK resident and only your UK-situated assets are within scope. Under the old domicile test the answer could easily have been different, because a domicile of origin was famously hard to shake off. That is what the reform removed.
Not for the scope of UK inheritance tax on a death from 6 April 2025 onwards. It still governs an estate where the death was on or before 5 April 2025, and it still matters outside tax — most importantly for succession law, which decides which country's law applies to your will and to assets on your death. There is no application process for changing domicile: it was always a question of fact about residence plus a settled intention to remain.
Between three and ten complete tax years of non-residence, set by a table in s.6A(3) of the Inheritance Tax Act 1984. Count the tax years you were UK resident in the 20 ending with your last resident year: 13 or fewer gives a three-year tail, 14 gives four, and so on up to 20 resident years, which gives ten. Ten consecutive non-resident tax years always ends it. GOV.UK also notes that someone who was deemed domiciled on 30 October 2024 loses the status after three years of non-residence.
If you are not a long-term UK resident at your death, section 6 makes property situated outside the UK excluded property, so overseas property, overseas accounts and shares in non-UK companies fall outside UK inheritance tax. They may still be taxed where they are, or where your children live. If you are a long-term UK resident, the worldwide estate is in scope wherever the assets sit.
Yes, if you are a long-term UK resident and they are not. Section 18(2) caps the exempt value at the nil-rate band — £325,000 — rather than making it unlimited. Section 267ZC lets a spouse who is not a long-term UK resident elect to be treated as one, which lifts the cap; the election can also be made by personal representatives after a death, within the conditions the section sets. The cost of electing is that the electing spouse's own worldwide estate then comes into scope on their death.
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