Last updated: 14 October 2026
Are offshore investments subject to UK inheritance tax?
It depends on your residence. From 6 April 2025, inheritance tax (IHT) is based on long-term UK residence rather than domicile. If you have been UK resident for at least 10 of the previous 20 tax years, your worldwide assets, including offshore bank accounts, funds and property, are within the scope of UK IHT. If you are not a long-term resident, only your UK assets are usually taxed. Offshore bonds and funds held by long-term residents get no special IHT exemption.
The long-term residence test
| Your position | IHT on overseas assets? |
| UK resident for 10 of the last 20 tax years | Yes, worldwide assets are in scope |
| UK resident for fewer than 10 of the last 20 years | No, UK assets only |
| Left the UK after being long-term resident | Worldwide assets stay in scope for between 3 and 10 years, depending on how long you were resident |
These rules replaced the old domicile and “deemed domicile” tests.
Common offshore investments
- Offshore bank accounts: included in your estate at their value on death
- Offshore bonds: part of your estate unless held in trust; also taxed as income when cashed in
- Overseas property: in your estate, and may also be taxed abroad
- Offshore funds and shares: valued at market value on death
- Excluded property trusts: the rules changed in 2025, and trust assets may now be in scope depending on the settlor’s residence status
Double taxation
If another country also taxes the asset, a double tax treaty or unilateral relief can reduce the UK IHT bill by the foreign tax paid on that asset. The UK has IHT treaties with only a few countries, including the USA, France, Italy, India, Ireland, the Netherlands, Pakistan, South Africa, Sweden and Switzerland.
Example
Jonathan has lived in the UK for 25 years. He dies leaving a UK home worth £600,000 and a Jersey investment portfolio worth £400,000. Both are in his UK estate. If his wife inherits everything, the spouse exemption applies and no IHT is due. If his estate passes to his children, it’s £1,000,000; after the £325,000 nil-rate band and the £175,000 residence nil-rate band, £500,000 is taxable at 40%, giving IHT of £200,000.
Planning ideas
- Use the spouse exemption and nil-rate bands
- Make lifetime gifts, which are exempt if you survive 7 years
- Consider trusts and life insurance written in trust, with advice
- Review offshore trusts under the 2025 rules
Reporting
Executors must report worldwide assets on the IHT400 for long-term residents. Foreign probate may also be needed. Executors should allow extra time, because overseas banks and registries can be slow to release assets.
Valuing foreign assets
Convert overseas assets to sterling at the exchange rate on the date of death, and get local valuations for foreign property. Keep the evidence with the IHT400.
Frequently asked questions
Does keeping money offshore avoid IHT?
Not for long-term UK residents.
Is an offshore bond IHT-free?
No, unless it’s held in a suitable trust.
What if I’ve moved abroad?
Worldwide assets can remain in scope for up to 10 years.
Do I need to declare foreign assets on death?
Yes, if they are in scope.
Related: overseas assets and inheritance tax and foreign inheritances.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with inheritance tax on overseas investments. See our personal tax accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
