Expat Families: Financial Planning for Children's Education, Inheritance and Cross-Border Wealth

Moving abroad as a family introduces a layer of financial and legal complexity that solo expats simply do not face. Education costs, children's inheritance rights, savings structures that work across borders, tax implications for children's income, and succession planning in multiple jurisdictions all require careful thought. This guide addresses the key financial planning considerations for expat families with children.

International School Fees: The Biggest Expat Family Budget Line

For most expat families, international school fees dwarf every other non-housing budget line. In popular expat cities, fees range from approximately:

Location	Annual fees per child (approximate, 2026)
Dubai (UK curriculum)	AED 40,000–100,000 (£8,800–£22,000)
Singapore (UK/IB)	SGD 25,000–55,000 (£14,500–£32,000)
Bangkok (British school)	THB 350,000–700,000 (£7,700–£15,400)
Madrid (British school)	€10,000–25,000 (£8,500–£21,000)
Nicosia/Limassol, Cyprus	€6,000–12,000 (£5,100–£10,200)
Hong Kong (international)	HKD 130,000–230,000 (£13,000–£23,000)
Shanghai/Beijing	USD 25,000–50,000 (£20,000–£40,000)

These fees are typically paid termly, in advance, and increase annually (often by 4–8% per year). Two children in international schools in Dubai could cost £30,000–£40,000 per year — more than many UK private schools.

Planning considerations:

• If your employer provides a school fees allowance, understand what it covers. In many employer packages, the allowance covers one school up to a specified cap; fees above the cap are your responsibility.
• Build school fee increases into long-term financial planning. Do not assume the year 1 fee is a reliable guide to year 5 costs.
• Understand the school's refund policy: most require one or two terms' notice for withdrawal, meaning you could face a significant liability if you need to relocate unexpectedly.
• Check whether the UK independent school you use domestically (if applicable) has an overseas campus — some do (Harrow Bangkok, GEMS Wellington in UAE), which provides curriculum continuity.

University Planning for Third-Culture Kids

Expat children — sometimes called "third-culture kids" (TCKs) — face unique considerations when approaching university:

Home fees entitlement: UK students who have lived abroad during their pre-university years may or may not qualify for UK home fees depending on their circumstances. The rules depend on ordinary residence in the UK at the point of application. Specialist advice is needed; do not assume.

Which country to study in? TCKs often have legitimate educational options in multiple countries — UK, USA, Australia, the country where they grew up, or the country of the other parent's nationality. Each has different cost profiles:

• UK undergraduate: £9,535/year tuition for 2025/26, rising to £9,790 for 2026/27 (home fees) + £10,000–£15,000 living costs
• USA (mid-tier private university): USD 35,000–60,000/year tuition + living
• Australia: AUD 30,000–45,000/year for international students
• Netherlands, Germany: Often very low tuition for EU/non-EU students

For HNW families, the US university experience is often preferred for its breadth and quality, but costs of USD 75,000–100,000 per year inclusive of tuition and living are not uncommon at elite US institutions.

Savings vehicles for university costs: Consider setting aside regular monthly amounts from when children are young. An offshore portfolio bond (see below) may be an efficient vehicle for HNW expat parents.

Children's Savings and Investment Structures

The UK's tax-advantaged savings landscape (Junior ISAs, Child Trust Funds) is available only to UK-resident children. Expat parents cannot contribute to a Junior ISA once the child becomes non-UK resident.

Available structures for expat children:

Offshore investment bonds: An offshore bond (typically Isle of Man or Dublin-based) allows a lump sum or regular savings to grow tax-deferred. Gains within the bond are not taxed until withdrawal; withdrawals can be timed to coincide with when the child (or the family) is in a low-tax jurisdiction. Top-slicing relief may apply on encashment. Suitable for HNW families with a 10–15+ year planning horizon.

Discretionary trusts: A trust established by the parents can accumulate and manage investments for children's benefit over time. Useful for succession planning and protecting against children receiving large sums at a young age. Tax treatment depends on the domicile of the settlor (trustor), the trust jurisdiction, and the residence of the beneficiaries.

Regular savings accounts: For smaller amounts, a straightforward multi-currency savings account or investment account held in the parent's name is often the simplest solution.

Note: Never use children's names to hold investments purely to reduce the parents' tax; UK settlements anti-avoidance rules may attribute the income back to the parent if the child is a minor.

Inheritance Planning for Expat Families

For internationally mobile families with children, inheritance planning is one of the most important and most neglected areas.

Which Country's Succession Law Applies?

This is the first question — and the answer determines everything else.

For EU countries: The EU Succession Regulation (Brussels IV), applied since 2015, generally allows EU residents to elect their national law to govern their succession. A UK national resident in Spain, for example, can elect for English law to govern their estate. If no election is made, the law of habitual residence at death applies. (Note: the UK has not adopted Brussels IV, but UK nationals in EU countries can still make the election.)

For non-EU countries: Each country applies its own rules. Many countries — particularly those with civil law systems — impose forced heirship rules that guarantee children minimum shares of the estate regardless of the will. This can conflict with UK testamentary freedom (the right to leave your estate to whoever you choose).

UAE: Non-Muslim expatriates can now register wills with the DIFC Wills Service, which allows a testator to apply English-law principles to UAE-based assets (property, bank accounts). Without a registered DIFC will, UAE courts would apply Sharia-influenced rules to the estate, including forced share provisions for children.

Spain: Forced heirship (legitima) guarantees children at least two-thirds of the estate. A UK national can elect English law under Brussels IV, but this election should be made explicitly in the will.

Thailand: Thai succession law applies to Thai-situated assets. An English-law will is recognised for foreign assets but Thai law governs Thai-based property and bank accounts.

Inheritance Tax Exposure for Long-Term UK Residents

UK inheritance tax (IHT) at 40% applies to the worldwide estate of individuals who are "long-term UK residents". From 6 April 2025 the old domicile-based regime was abolished and replaced with a residence-based test: broadly, you are a long-term UK resident — and therefore exposed to IHT on your worldwide assets — if you have been UK tax-resident for at least 10 of the previous 20 tax years. This is one of the most common planning oversights for long-term expats.

Residence, not domicile: Under the rules in force since 6 April 2025, the historic concepts of "domicile of origin", "deemed domicile" and the "15 of 20 years" test no longer determine IHT exposure. Worldwide IHT exposure now turns on your UK residence history.

Shedding long-term resident status: Once you cease to be UK-resident, your worldwide estate generally remains within the scope of UK IHT for a "tail" period (broadly between 3 and 10 years, depending on how long you were UK-resident) before falling away. Professional legal advice is essential.

IHT nil-rate bands and exemptions: As of 2026, the IHT nil-rate band is £325,000; the residence nil-rate band (for residential property passed to direct descendants) is £175,000. Total tax-free: up to £1 million per couple using both bands fully. Assets above these thresholds are taxed at 40%.

Planning tools: Potentially exempt transfers (PETs — gifts that become exempt after 7 years), business property relief (BPR), agricultural property relief (APR), life insurance in trust, and trusts are all used in IHT planning. Seek specialist IHT advice from a UK-qualified adviser.

Planning for Minor Children Inheriting

If both parents die unexpectedly and children are minors, who manages the estate until they reach adulthood? Consider:

• Guardianship: Your will should appoint a guardian for minor children. If you live abroad, the guardian's location matters practically.
• Trustee structure: A discretionary trust with professional trustees provides managed access to the estate until children are old enough to manage it themselves.
• Life assurance in trust: A life assurance policy written in trust provides immediate cash outside the estate for the children's maintenance without probate delay.

Tax on Children's Income

In most jurisdictions, children's income is either exempt (below tax thresholds) or taxable in the child's own name. UK-specific anti-avoidance rules ("settlement" rules) attribute income from assets settled by a parent back to the parent if the child is under 18 and the income exceeds £100 per year in the UK.

In a zero-tax jurisdiction (UAE, Qatar, Bahrain), this is irrelevant for local income. But if the family has UK-source income held in a child's name, UK rules may still apply.

Moving Back: The TCK Question

Third-culture kids who grew up in multiple countries face particular challenges when they return to a "home" country for university or work — often a country they barely know. Financial planning for this transition includes:

• Helping children establish UK bank accounts before they need them (some UK banks require in-person branch visits)
• Ensuring children understand UK tax basics — many TCKs have never filed a UK tax return
• Supporting children's National Insurance contribution record from their first UK employment
• Advising on first property purchase in the UK, if applicable

Key Compliance Caveats

• Inheritance laws and IHT rules change. The UK government has periodically reformed IHT; from 6 April 2027, most unused pension funds and death benefits are brought within the value of the estate for IHT (legislated in Finance Act 2026). Always work from current professional advice.
• Forced heirship rules in civil law countries can override wills. Never assume a UK will is sufficient for overseas assets.
• Investments can fall as well as rise. Educational savings and investment structures are subject to market risk.
• Trust laws are complex and vary significantly by jurisdiction. Seek specialist advice before establishing any trust structure.
• This guide is for general information only and does not constitute legal, tax or financial advice.

How Global Investments Can Help

Expat families have distinctive financial planning needs that go beyond standard wealth management. Our team has deep experience assisting internationally mobile families with:

• International estate planning — structuring wills and asset ownership across multiple jurisdictions, working with specialist international succession lawyers
• Offshore investment structures — Isle of Man-based bonds and portfolio solutions suited to HNW families with children
• International school fee planning — modelling school costs and building savings strategies around the academic timeline
• University funding — helping families plan for the significant costs of international university education
• IHT planning — reviewing your long-term UK residence (IHT) exposure and implementing appropriate mitigation strategies

Contact us for a confidential family financial planning review.

All information correct to the best of our knowledge as of June 2026. Legal and tax rules change frequently across all the jurisdictions mentioned. Nothing here constitutes professional advice. Seek qualified legal, tax and financial advice from professionals experienced in your relevant jurisdictions.