Last updated: 14 October 2026
Are your late husband’s overseas assets exempt from UK inheritance tax?
It depends on his tax status when he died, not where the assets are. For deaths on or after 6 April 2025, UK inheritance tax (IHT) applies to worldwide assets if the person was a long-term UK resident, which broadly means UK resident for at least 10 of the previous 20 tax years. Before that date, it depended on domicile. If he was a long-term resident or UK-domiciled, his overseas assets are within UK IHT. Assets left to you as his spouse are normally exempt anyway.
The spouse exemption
Anything a husband leaves to his wife (or civil partner) is exempt from IHT, whether in the UK or abroad, if both are long-term UK residents or UK-domiciled. If the surviving spouse isn’t, the exemption is limited to £325,000, unless the survivor elects to be treated as UK-domiciled (or long-term resident).
Who is taxed on worldwide assets
| Death | Test for worldwide IHT |
| Before 6 April 2025 | UK-domiciled or deemed domiciled (resident 15 of 20 years) |
| On or after 6 April 2025 | Long-term UK resident (10 of the previous 20 tax years) |
People who aren’t caught are taxed only on UK assets, such as UK property and UK bank accounts.
Overseas taxes and double tax relief
The country where the assets are located may also charge inheritance or estate tax. The UK has IHT treaties with a few countries, including the USA, France, Ireland, India, Pakistan, Italy, the Netherlands, Sweden and South Africa. Where there is no treaty, unilateral relief normally gives credit for foreign tax paid on the same assets.
Example
Ahmed was a long-term UK resident and died in 2026 owning a UK home and a flat in Lahore. He left the UK home to his wife and the flat to his son. The UK home is spouse-exempt. The flat is in his estate for UK IHT, with credit for any Pakistani tax under the UK–Pakistan treaty.
What executors need to do
- Establish the deceased’s residence history for the last 20 tax years
2. List and value all worldwide assets at the date of death, in sterling
3. Claim spouse exemption and transfer of unused nil-rate band where relevant
4. Report foreign assets on form IHT417 with the IHT400
5. Claim double tax relief for foreign taxes paid
Mistakes with overseas assets
Executors often forget foreign bank accounts, overseas pensions and holiday homes, or value them in the wrong currency. Convert each asset to sterling at the exchange rate on the date of death and keep the rate you used. If the country where the asset is held also charges inheritance or estate tax, check whether a double taxation treaty applies or whether unilateral relief can reduce UK IHT. Foreign probate can take months, so get local valuations early and keep copies of every foreign tax return and receipt for the UK IHT account.
Frequently asked questions
Do I pay IHT on the overseas assets I inherited from my husband?
Usually not, because of the spouse exemption.
What happens when I die?
Your estate, including assets inherited from him, may then be taxable. His unused nil-rate band can transfer to you.
Is there capital gains tax on overseas assets inherited?
No. You inherit them at market value at the date of death.
Do I need a foreign lawyer?
Usually yes, to transfer legal ownership of assets abroad.
Related: is a foreign inheritance taxable in the UK.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with inheritance tax and overseas assets. See our inheritance tax planning 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.
