In what may be the most underreported tax reform in decades, British expatriates have just been granted a remarkable degree of freedom from UK Inheritance Tax (IHT) — and the implications are profound, says Mark Clubb, executive chairman, TEAM Plc.
As Executive Chairman of TEAM Plc, a global wealth and asset management firm advising thousands of clients across the world, I’ve seen firsthand how outdated domicile rules created years of legal complexity, anxiety, and expense for British families living abroad.
Until now, the UK’s IHT regime operated on a notoriously ambiguous concept: domicile. It was a status that could follow you for life — regardless of where you lived, paid tax, or held assets. For many of our clients, especially those with international spouses and globally held portfolios, this meant 40% of their worldwide estate remained at risk, even after decades outside the UK.
That changed on 6 April 2025, when the UK government replaced domicile-based IHT rules with a new, residency-based framework — a move that finally brings logic and predictability to cross-border estate planning.
What Exactly Changed?
The key updates under the new rules:
• ✅ UK IHT liability now applies if you were UK resident for 10 of the last 20 years
• ✅ Once you’ve been non-resident for 10 years, your non-UK assets are outside the IHT net
• ✅ No more lifetime “deemed domicile” status automatically tethering you to the UK tax system
In plain terms: if you’ve genuinely left the UK and remained abroad for a decade, your global estate (except for UK assets) may now fall outside HMRC’s reach — legally, cleanly, and without needing trusts, offshore wrappers, or elaborate planning.
Expert View: Martin O’Malley
Martin O’Malley, at Neba Private Clients is widely regarded as one of the most trusted experts in international tax and estate planning. This reform is nothing short of a generational reset: “This change finally allows British expats to plan with clarity, not just complexity. For those who’ve built lives and legacies overseas, it offers a clean break from the outdated presumption that the UK always has a claim on your estate. If you’ve been out for 10 years, that shadow now lifts.”
Martin has spent years helping clients navigate the maze of domicile law. His message now is clear: Review everything. The rules have changed.
The non-UK Spouse Trap — now solvable
One of the most problematic areas under the old rules was how estates were treated when passing to a non-UK domiciled spouse. Previously, only £325,000 could be passed tax-free; beyond that, a 40% IHT rate could apply unless the spouse elected to become UK domiciled — often creating further complications.
Under the new regime, these risks are dramatically reduced. Couples can now structure ownership to keep UK assets under the IHT threshold, while holding global assets securely outside the UK tax net — without resorting to trusts or domicile elections.
The Global Opportunity
At TEAM Plc, we work with clients across multiple jurisdictions — from executives in Singapore to retirees in Portugal, entrepreneurs in Dubai to dual-national families in Australia. For many of them, this reform fundamentally changes the equation.
Let’s be clear: this is not about avoidance. It’s about legal clarity, strategic control, and tax fairness. And it comes at a time when global citizens are demanding exactly that.
What to Do Next
If you’re a British expat — or planning to become one — the next steps are straightforward:
• 🔍 Review your UK tax residency timeline carefully
• 🌍 Reassess where your assets are held, and how they’re structured
• 💬 Consider simplifying or winding down outdated trusts
• 👥 Check your spouse’s status and any inheritance exposure
• 🧭 Explore IHT-friendly jurisdictions for long-term retirement
This isn’t just a technical update. It’s a transformational opportunity for British families with international lives.
Take advice from Martin — he’s the best in this field. And if you haven’t reviewed your estate planning since this reform, you’re already behind.
