Last updated: 14 October 2026
What is the UK ten-year rule for inheritance tax?
Since 6 April 2025, inheritance tax on worldwide assets depends on long-term UK residence, not domicile. You’re a long-term resident if you’ve been UK resident for at least 10 of the previous 20 tax years. Long-term residents pay IHT on their worldwide estate. Non-long-term residents pay IHT only on UK assets. When a long-term resident leaves the UK, they remain within the IHT net for a “tail” of between 3 and 10 years, depending on how long they lived here.
The long-term residence test
| UK residence history (out of last 20 years) | Status |
| Fewer than 10 years | Not long-term resident: UK assets only |
| 10 years or more | Long-term resident: worldwide assets |
The tail after leaving
| Years of UK residence before leaving | IHT tail |
| 10 to 13 | 3 years |
| 14 | 4 years |
| 15 | 5 years |
| 16 | 6 years |
| 17 | 7 years |
| 18 | 8 years |
| 19 | 9 years |
| 20 or more | 10 years |
Example
Anna, a German national, has lived in the UK since 2008, so she’s a long-term resident. She retires to Spain in April 2026. She was UK resident for 18 tax years, from 2008/09 to 2025/26, so her tail is 8 years. If she dies within the tail, her worldwide estate is subject to UK IHT. After that, only UK assets, such as a London flat, remain within UK IHT.
UK assets are always in scope
Whatever your residence status, UK property, UK bank accounts and shares in UK companies are subject to UK IHT. UK residential property held through an overseas company also remains taxable.
Trusts
From April 2025, excluded property status for trusts depends on whether the settlor is a long-term resident. Trusts set up by people who later become long-term residents can come within IHT, with 10-yearly and exit charges.
Spouses
Gifts from a long-term resident to a spouse who isn’t a long-term resident are exempt only up to £325,000, unless the spouse elects to be treated as long-term resident.
Double tax treaties
The UK has IHT treaties with a few countries, including the USA, France, Italy, the Netherlands, Sweden, Ireland, India, Pakistan and Switzerland, which can change the outcome.
Common mistakes
- Assuming leaving the UK ends IHT exposure immediately
- Counting years incorrectly (split years count as UK resident)
- Forgetting UK property stays in scope
- Not reviewing trusts after April 2025
Records to keep
Keep evidence of your residence history: Statutory Residence Test records, tax returns and travel records.
Planning before you leave
If you plan to leave the UK, consider the tail before making large gifts or changing your will. Gifts made during the tail are still potentially exempt transfers, so they fall out of your estate after 7 years, and assets you move abroad remain in scope until the tail ends. Life insurance written in trust can cover the IHT risk in the meantime.
Frequently asked questions
Does domicile still matter?
Not for IHT from April 2025, except under some treaties.
Does a UK pension count?
From April 2027, unused pensions fall into estates.
Are under-20s treated differently?
Yes, the test uses years since birth for younger people.
What if I return to the UK later?
Earlier years still count within the rolling 20-year window, so you may become long-term resident again quickly.
Related: IHT on overseas assets, contacting HMRC about IHT and HMRC questions about money overseas.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with international inheritance tax planning. 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.
