From Domicile to Long-Term Residence: What Changed in April 2025
April 2025 changed the inheritance tax rules forever: domicile is out, long-term residence is in. Many globally mobile families are now caught in the UK IHT net without realising it. Are your overseas assets suddenly at risk? Let’s talk.
For decades, UK inheritance tax (IHT) was anchored in the concept of domicile. If you were UK- domiciled, your worldwide estate fell within the scope of IHT. If you were non-domiciled, you were only caught on UK assets – at least until you became “deemed domiciled” after 15 years of UK residence.
That all changed in April 2025. The government has replaced the domicile test with a long-term residence test. From now on, if you’ve lived in the UK for 10 out of the last 20 years, your worldwide estate will be exposed to IHT, regardless of where you were born or where you consider your permanent home.
This shift is seismic. Families who thought their overseas assets were safely beyond HMRC’s reach now need to think again. It doesn’t matter if you still call another country “home” – what matters is your UK residence record.
For globally mobile families, this poses both risks and opportunities. The risks are obvious: foreign assets (property, businesses, investments) suddenly within the UK IHT net.
The opportunities lie in proactive planning:
• Reviewing trust structures, especially “excluded property” trusts.
• Considering the timing of your residence and potential future exit.
• Using allowances, exemptions, and cross-border planning to reduce exposure.
The message is clear: if you are internationally connected and have spent significant time in the UK, you can no longer assume your non-dom status will shield you.
Inheritance tax is one of the most complex and politicised areas of tax in the UK. Doing nothing could mean your family faces an unexpected 40% tax bill on assets you never thought were at risk.
As the Inheritance Guru, I specialise in guiding UK domiciliaries and non-doms through these shifting rules. If this change now is the time to act.
To discuss your position email help@theinheritanceguru.com.
➡️ To find out more or to book a free consultation, visit https://calendly.com/sallytrish/15-minute-consultation