Millions of Brit expats face Inheritance Tax shock under new UK rules - London Business News | Londonlovesbusiness.com

Up to 4.8 million British-born people living overseas may need urgent reviews of inheritance tax exposure as UK rules tighten for internationally mobile individuals. The UK is moving from a domicile-based approach to a residence-based regime centered on long-term UK residence. Under the new framework, individuals can remain exposed to UK inheritance tax on worldwide assets if they were UK tax resident for at least 10 of the previous 20 tax years. Exposure can continue after leaving Britain, potentially lasting up to 10 tax years depending on prior UK residency history. Further reforms from April 2027 are expected to pull pension wealth into the inheritance tax net, including unused pension funds and pension death benefits.

"Up to 4.8 million British-born people living overseas may need urgent reviews of their inheritance tax exposure as Britain tightens the rules around internationally mobile individuals, warns Nigel Green, CEO of global financial advisory giant deVere Group."

"For decades inheritance tax exposure relied heavily on the concept of domicile - a complex legal framework linked to permanent home intentions and long-term family ties. From April 2025, however, the UK moved toward a residence-based regime centred on "long-term UK residence." Under the new framework, individuals can potentially remain exposed to UK inheritance tax on worldwide assets if they were UK tax resident for at least 10 out of the previous 20 tax years."

"Exposure can also continue long after somebody leaves Britain. Depending on previous UK residency history, former residents may remain within the inheritance tax net for up to 10 tax years after departure. "Many expats think their UK tax exposure ends the moment they move overseas," Nigel Green says. "It doesn't.""

"Pressure is expected to intensify further from April 2027. Current government plans will bring most unused pension funds and pension death benefits into inheritance tax, marking one of the biggest changes to UK estate planning in years. Defined contribution pensions have historically been viewed as one of the most inheritance-ta"

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