How Inheritance Tax works: thresholds, rules and allowances
If you die when you are based outside the UK
If you鈥檙e based abroad, Inheritance Tax is only paid on your UK assets, for example property or bank accounts in the UK.
HM Revenue and Customs (HMRC) will treat you as being based abroad if you have lived in the UK for less than 10 years in the last 20.
Inheritance Tax is not paid on 鈥榚xcluded assets鈥� like:
- foreign currency accounts with a bank or the Post Office
- overseas pensions
- holdings in authorised unit trusts and open-ended investment companies
There are different rules if you have assets in a trust or government gilts, or you鈥檙e a member of visiting armed forces.
Contact the Inheritance Tax helpline if you鈥檙e not sure whether your assets are excluded.
For deaths on or before 5 April 2025
The person who died will be treated as being based in the UK if either:
- their permanent home (domicile) was in the UK
- they lived in the UK for 15 of the last 20 years
- they had their permanent home in the UK at any time in the last 3 years of their life
Double-taxation treaties
Your executor might be able to reclaim tax through a double-taxation treaty if Inheritance Tax is charged on the same assets by the UK and the country where you lived.