UK inheritance tax after you leave the UK

Several popular expat destinations, the UAE among them, have no inheritance tax. That leads many people to assume the question ends when they leave the UK. It does not, and the rules changed in 2025.

The test: long term UK resident

Since 6 April 2025, UK inheritance tax on assets outside the UK depends on whether you are a long term UK resident. You are one if you were UK resident for at least 10 of the 20 tax years immediately before the tax year of the event, such as death or a gift into trust. Residence is decided by the statutory residence test. A long term resident can be charged UK inheritance tax on assets worldwide, including property, bank accounts and investments in the UAE.

How long it lasts after you leave

You do not stop being a long term resident on the day you leave. The period you stay in scope depends on how long you were resident, up to a maximum of ten years.

• 10 to 13 years of UK residence: about 3 years after you leave.
• 14 years: 4 years.
• 15 years: 5 years.
• Each further year of residence adds a year, up to a maximum of 10 years after leaving.

The clock resets after ten consecutive tax years of non UK residence. Our UK inheritance tax residence checker gives a quick estimate from your own figures.

Assets that are always in scope

Even if you are not a long term resident, UK property and other assets located in the UK can still be charged. Being outside the UK does not take a UK house outside the net.

The rate and allowances

• The standard rate is 40% on the value above the nil rate band of £325,000.
• An extra residence nil rate band of up to £175,000 can apply when a home passes to children or grandchildren, reduced for larger estates.
• Both are currently frozen until April 2031.
• Gifts to a spouse or civil partner are generally exempt, with limits in cross border cases.
• Gifts to other people can fall outside the estate if you live for seven years after making them.

Pensions are changing

From 6 April 2027, most unused pension funds and death benefits from registered pension schemes are due to count towards an estate for UK inheritance tax. The change was passed in the Finance Act 2026. Death in service lump sums are exempt. Personal representatives are responsible for reporting and paying the tax, so the details matter for anyone still inside the net.

What to do

• Count your UK residence years carefully, using the residence checker as a starting point.
• List what you own and where, including UK property and pensions.
• Review your wills in each country so that they work together.
• Look at how assets are owned and whether any gifts make sense.
• Consider life cover written in trust to fund any bill without selling assets.

Estate planning, 2 minute read. Last reviewed October 2026. Applies to: UK rules. General information, not personal advice.