What changed in April 2025

Until April 2025, whether your non-UK assets faced UK inheritance tax turned on domicile, broadly where your permanent home is. [7] That system has gone. It has been replaced by a test based on years of UK residence. [1][3]

You are a long-term UK resident if you were UK tax resident for at least 10 of the 20 tax years before the year of a death or gift. [1][2]

How long it follows you after you leave

If you are a long-term UK resident when you leave, you stay one for a period afterwards. The period depends on how many of the previous 20 years you were UK resident: [2]

Years UK resident (of the last 20) Years you stay within UK inheritance tax after leaving
10 to 13 3
14 4
15 5
16 6
17 7
18 8
19 9
20 10

So someone who has lived in the UK all their adult life will typically remain within UK inheritance tax on worldwide assets for 10 tax years after leaving. Someone who arrived 12 years ago will remain within it for 3. [2]

Coming back resets the clock. If you return after at least 10 consecutive years of non-residence, earlier years no longer count. Only the year you return and later years do. [1]

What stays within UK inheritance tax regardless

  • UK assets. Property, bank accounts and other assets located in the UK remain within UK inheritance tax wherever you live. [7]
  • Trusts. Overseas assets in a trust you set up or added to can be within inheritance tax even if you weren't a long-term resident at the time. Trustees should be told when your residence status changes, because separate trust charges may apply. [1]

If you left the UK before April 2025

Transitional rules apply. In outline: [1]

  • If you were neither UK domiciled nor deemed UK domiciled on 30 October 2024, and are not UK resident in 2025–26 (and don't return), you are not a long-term resident.
  • If you were deemed UK domiciled on 30 October 2024, you stop being a long-term resident after 3 years of non-residence, provided you are non-resident in 2025–26 and don't return.

These rules have conditions beyond this summary. Have them checked against your own dates.

The basics that haven't changed

  • The standard rate is 40% on the part of an estate above the tax-free threshold. [4]
  • The threshold is £325,000, which can rise to £500,000 where a home passes to children or grandchildren. [4]
  • There's normally no inheritance tax on what you leave to a spouse or civil partner. [4]
  • Other gifts can be taxed if you give away more than £325,000 and die within 7 years. [4]
  • One change is coming. From 6 April 2027, most unused pension funds and pension death benefits count as part of your estate for inheritance tax. This is already law. [5]

What this means if you're moving to Dubai

  • Plan for the whole period. If you'll remain within UK inheritance tax for several years after leaving, your estate plan needs to work for that whole period, not just from the day you arrive in Dubai.
  • Look at UK assets separately. A London home stays within UK inheritance tax indefinitely, so how it's held and who inherits it deserve their own plan. [7]
  • Line up the wills. A UK will and a UAE will should work together, with each covering the right assets. See Making a will in the UAE.
  • Count your years precisely. The table turns on exact tax years of UK residence, decided by the Statutory Residence Test. A split year counts as a full year of UK residence. [2] See Am I still UK tax resident?.

How Marlborough Gulf helps

What we do:

  • We bring your estate plan into the wider plan for your move.
  • We set out which assets sit in which country, and how long UK inheritance tax will apply.
  • We help design the structures that hold them.

What our partners do:

  • A UK tax adviser gives formal inheritance tax advice.
  • Law firms draft and register your wills and any trust or foundation documents.
Book a consultation

Questions people ask

I've lived in the UK all my life. If I move to Dubai, when does UK inheritance tax stop applying to my overseas assets?

After 10 full tax years of non-residence, on the current rules. Your UK assets remain within UK inheritance tax throughout. [2][7]

Is it still about domicile?

No. For deaths and gifts from 6 April 2025, the test is long-term UK residence. [1][3]

Does my Dubai home count?

While you remain a long-term UK resident, your worldwide assets, including a Dubai home, can be within UK inheritance tax. After the period ends, only UK assets are. [1][2][7]

Did the October 2026 Budget change this?

Not the long-term residence test. It announced a rule on how trustees' debts are deducted when valuing trust property, from 28 October 2026 (measure 1.26), and technical changes to bringing pensions into inheritance tax from 6 April 2027 (measure 1.27). [5]

What is the 5-year rule for non-residents?

It's a capital gains rule, separate from inheritance tax. If you return to the UK after 5 years or less away, gains made while you were away can be taxed on your return. The inheritance tax period after leaving is 3 to 10 years. [2][6]

This guide is general information, not personal tax advice. Inheritance tax depends on your exact residence history and the assets involved. Speak to a qualified UK tax adviser before acting.

Related guides

Sources

Last checked 28 October 2026.

  1. HMRC, Inheritance Tax if you're a long-term UK resident, published 6 Apr 2025. https://www.gov.uk/guidance/inheritance-tax-if-youre-a-long-term-uk-resident
  2. HMRC, Inheritance Tax Manual IHTM47020: long-term UK residence test, updated 7 Apr 2026. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm47020
  3. HMRC, Inheritance Tax Manual IHTM47001: introduction, updated 7 Apr 2026. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm47001
  4. GOV.UK, Inheritance Tax. https://www.gov.uk/inheritance-tax
  5. HM Treasury and HMRC, Budget 2026: Overview of tax legislation and rates, measures 1.26 and 1.27, 28 Oct 2026. https://www.gov.uk/government/publications/budget-2026-overview-of-tax-legislation-and-rates-ootlar/budget-2026-overview-of-tax-legislation-and-rates-ootlar
  6. HMRC, RDR3: Statutory Residence Test notes, temporary non-residence section, updated 11 Jun 2026. https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt/guidance-note-for-statutory-residence-test-srt-rdr3
  7. GOV.UK, Inheritance Tax: if you die when you are based outside the UK. https://www.gov.uk/inheritance-tax/when-someone-living-outside-the-uk-dies