Estate Planning for Expats: A Cross-Border Guide

For a UK national living abroad, estate planning is rarely straightforward. A UK will drawn up before emigration may be legally valid but practically ineffective in countries where it is applied — or entirely overridden by local succession law for assets situated there. UK Inheritance Tax may continue to apply on worldwide assets regardless of how long you have lived abroad. And the trust structures that can legitimately reduce IHT exposure for non-UK domiciles must be created at the right time and correctly structured to be effective.

Getting cross-border estate planning right requires coordinated advice from UK legal and tax specialists alongside advisers in your country of residence. This guide sets out the key issues.

Wills for internationally mobile individuals

The validity problem

A UK will drawn up under English law is typically valid in England and Wales. Its recognition in other countries depends on those countries' own laws, which vary widely. In civil law jurisdictions — France, Spain, Germany, Greece, and most of continental Europe — the rules governing wills and inheritance differ materially from English law.

The most effective approach for an internationally mobile individual is usually:

• A primary will drafted under English law, expressly governing English law assets and appointing English executors
• Jurisdiction-specific wills for immoveable property (real estate) in countries where local form requirements or forced heirship rules make a local will essential
• Coordination between the wills so they do not inadvertently revoke each other

EU Succession Regulation (Brussels IV)

For UK nationals resident in an EU member state, the EU Succession Regulation (Brussels IV) is highly relevant. Under Brussels IV, the succession law of the country of habitual residence applies by default to the entire estate — including assets in other EU countries.

However, Brussels IV allows an EU resident to elect, in their will, for the law of their nationality to govern their worldwide estate. For UK nationals in EU countries (the UK is no longer bound by Brussels IV post-Brexit, but the Regulation still applies in EU member states), this election can mean English succession law governs assets across the EU, providing greater flexibility — including the ability to disinherit children, which is not permitted under many civil law systems.

Making a valid Brussels IV election requires careful drafting by a solicitor with international expertise.

Forced heirship rules

Many countries — including Spain, France, Germany, Greece, and most of the Middle East — impose forced heirship rules that guarantee certain relatives (typically children, and in some systems spouses) a minimum share of the estate, regardless of what the will says. This applies to assets situated in those countries.

If you own property in such a country, your estate plan needs to either accommodate forced heirship rules or explore structures (such as holding property through a company) that may modify how they apply. Legal advice in the relevant jurisdiction is essential.

UK Inheritance Tax and domicile

The scope of UK IHT

UK Inheritance Tax applies at 40% (above the nil rate band, currently £325,000 per individual, potentially increased by the residence nil rate band of up to £175,000 for qualifying property passed to direct descendants) on the worldwide assets of individuals who are within the scope of UK IHT. From 6 April 2025, that scope is determined by long-term UK residence rather than domicile.

This is the key issue for UK expats: even after emigrating, you remain exposed to UK IHT on your worldwide assets for as long as you are treated as a long-term UK resident.

Long-term UK residence (replacing deemed domicile)

The domicile-based regime — including the old "deemed domicile" rule, under which 15 of the previous 20 tax years of UK residence triggered worldwide IHT exposure — was abolished from 6 April 2025. It is replaced by a long-term UK resident test: broadly, you are within the scope of UK IHT on your worldwide estate if you have been UK resident for at least 10 of the previous 20 tax years. After you leave the UK, this status does not end immediately — there is a "tail" (up to 10 years for the longest-resident individuals, on a sliding scale) during which worldwide assets remain in scope. This catches many long-term expats who assume they have left UK IHT behind.

Excluded property

There is an important exception: non-UK sited assets held by an individual who is not a long-term UK resident are "excluded property" for UK IHT purposes and do not count towards the UK taxable estate. This creates a planning opportunity for those who can place non-UK assets outside the IHT net before becoming, or after ceasing to be, a long-term UK resident.

Spousal exemption

Transfers between spouses (including on death) are generally fully exempt from IHT where both spouses are within the scope of UK IHT (broadly, both long-term UK residents). Where the recipient spouse is not a long-term UK resident, the exemption from the long-term UK resident spouse is capped — at £325,000 (equal to the nil rate band) — though that spouse can elect to be treated as within the scope of UK IHT, giving an unlimited exemption but also bringing their worldwide assets within UK IHT. Following the 6 April 2025 reforms these rules are framed by reference to long-term UK residence rather than domicile; take current advice.

Reducing IHT exposure

Legitimate IHT mitigation strategies for expats include:

• Gifts: potentially exempt transfers (PETs) — gifts to individuals — become fully exempt from IHT after seven years, provided the donor survives the gift. Gifts out of normal income are immediately exempt.
• Business property relief: assets qualifying as business property may attract 50% or 100% relief from IHT, though the rules on what qualifies are complex. Note that from 6 April 2026, 100% BPR (and agricultural property relief) is capped at a combined £2.5 million per estate (originally announced as £1 million in the October 2024 Budget, then raised to £2.5 million in December 2025; the allowance is transferable between spouses/civil partners), with relief above that allowance reduced to 50%, and AIM/unlisted shares attracting 50% relief only.
• Excluded property trusts: see below.
• Life assurance in trust: an offshore life assurance policy written in trust, with the death benefit payable to the trustees rather than the estate, can provide liquidity to pay IHT without increasing the taxable estate.

See our dedicated guide on inheritance tax planning for expats for more detail.

Trusts for non-UK resident beneficiaries and settlors

Why trusts are used

Trusts serve two main purposes in international estate planning: they provide control over how assets are distributed (particularly across generations), and they can provide IHT efficiency for qualifying non-UK domiciled individuals.

Excluded property trusts

An excluded property trust is a discretionary trust funded with non-UK sited assets, settled by an individual who is not a long-term UK resident. The assets in the trust can be excluded property for UK IHT purposes — sitting outside the scope of the ten-year periodic charge and exit charges that normally apply to discretionary trusts.

Important: the 6 April 2025 reforms changed how excluded property trusts work. Excluded property status now turns on the settlor's long-term UK residence status rather than domicile, and crucially the protection is no longer permanently "locked in" — under the new rules, if the settlor becomes (or is) a long-term UK resident, trust assets can be brought within the scope of UK IHT. The pre-2025 certainty that a trust settled before deemed domicile would stay outside IHT indefinitely no longer applies. Timing remains critical, and existing trusts should be reviewed against the current rules. See our dedicated guide on excluded property trusts for more detail.

Settlor-interested trusts

A trust is "settlor-interested" if the settlor (or their spouse) can benefit from it. Settlor-interested trusts generally do not provide IHT benefits — the settled assets are typically still treated as part of the settlor's estate. They may still be useful for succession and asset protection purposes, but the tax analysis must be clear before proceeding.

The Pre-Owned Asset Tax (POAT) charge is also relevant: if you give away assets and then benefit from them, a tax charge may arise to prevent simple avoidance strategies.

Trust Registration Service (TRS)

Since 2022, most UK trusts — and non-UK trusts with UK tax consequences or UK-resident beneficial owners — must be registered on HMRC's Trust Registration Service. Non-compliance carries penalties. If you are a trustee or beneficiary of a trust with any UK connection, TRS registration should be verified.

Beneficiary nominations

Many assets pass outside the will through beneficiary nominations:

• Pension death benefits: UK and international pension schemes typically allow nomination of beneficiaries for lump sum death benefits. These nominations take legal precedence over will provisions.
• Offshore bonds: many offshore investment bonds allow nomination of beneficiaries for the death benefit, enabling rapid payment without probate.
• Life insurance: policies written in trust or with named beneficiaries pass outside the estate.

Nominations should be reviewed regularly — particularly after marriage, divorce, or the birth of children — to ensure they reflect current intentions. A nomination made many years ago may now direct significant assets to the wrong person.

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This article is for general information only and does not constitute legal, tax, or financial advice. Estate planning law is complex and varies significantly by jurisdiction. You should always seek advice from a qualified international solicitor, tax adviser, and financial planner before making estate planning decisions.

How Global Investments can help

Global Investments coordinates international estate planning for UK expat clients, working alongside specialist solicitors and tax advisers. We can help you understand your UK IHT exposure, assess the suitability of excluded property trust structures, and ensure your investment and insurance assets are coordinated with your estate plan. Contact our team to begin a review, or read our guide on using trusts for wealth transfer.