Inheritance tax break that could lure expats back to the UK

Newsletter issue – July 2025

Changes introduced by Chancellor Rachel Reeves on April 6 mean Britons who have lived abroad for 10 years are no longer subject to UK inheritance tax on their global assets.

The “non-dom” tax regime (the previous system allowing UK residents to avoid tax on foreign income) has been replaced by residency-based taxation. This means that those who have spent a decade overseas can return to the UK for up to nine years without being liable for inheritance tax on their worldwide assets. Any UK assets will still be subject to death duties.

It is suggested that the new rules allow wealthy individuals to strategically manage their tax liabilities based on their residency status. Countries like Italy, Switzerland, Monaco, and the UAE are popular among Britons seeking favourable tax regimes.

The UK residency test for tax status considers you a UK resident if you spend 183+ days in the country per tax year. You may be considered a non-resident if you spend fewer than 16 days in the UK, or 46 days if you were not a UK resident in all of the previous three tax years.