UK Inheritance Tax Planning 2025: Residency Vs Deemed Domicile Rules

UK Inheritance Tax Planning 2025: Residency Vs Deemed Domicile Rules. In the Autumn Budget 2024, significant changes were introduced that will benefit non-UK residents, particularly those who have lived outside the UK for extended periods. Starting April 2025, the UK inheritance tax will shift from a domicile-based system to a residency-based system, simplifying the tax landscape significantly. This change means that the historical challenges associated with assessing domicile—such as birthplace and familial connections—will no longer impact the inheritance tax liabilities for non-residents. For example, a client with long-standing ties outside the UK would no longer be liable for UK inheritance tax on their global assets under the new rules, providing they do not return to live in the UK.

This legislative update is especially favourable for those who have lived abroad for over a decade and plan to continue doing so, as their non-UK assets will not be subject to UK inheritance tax. However, UK residents will face stricter compliance, with the government drawing a firm line to curb avoidance strategies. If you're living outside the UK or planning to move abroad, this change could be very advantageous for you. For a clearer understanding of how these changes might benefit your specific situation and to discuss your options, click the link below for a free consultation with a senior financial adviser at Cameron James.

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Key Points of the Video:
UK Inheritance Tax Planning 2025: Residency Vs Deemed Domicile Rules
➡ Residency-Based Taxation: The Autumn Budget 2024 introduces a significant shift in UK
Inheritance Tax Planning 2025, moving from a system based on domicile to one focused on.
residency starting in April 2025. This change simplifies the tax framework for individuals who
have lived outside the UK for long periods.
➡ Benefits for Non-UK Residents: Non-UK residents stand to gain substantially from the new
legislation. If they have been living abroad for more than ten years and continue to do so, their
global assets will no longer be subject to UK inheritance tax. This reform is particularly
advantageous for those who do not plan to return to the UK to live.
➡Tax Liabilities: The reform aims to reduce the complexities previously faced in determining an
individual's tax liability based on domicile factors such as birthplace and family background,
which often led to uncertain tax obligations.
➡ Stricter Compliance for UK Residents: The new rules impose more stringent requirements on UK
residents to ensure they pay inheritance tax. The government's initiative aims to prevent tax
avoidance by making the guidelines clearer and more enforceable.

Video Timestamps:
00:00 UK Inheritance Tax Planning 2025 Overview
00:28 Residency-Based Taxation
01:33 Residency Vs Deemed Domicile Rules
03:00 New law's clarity for non-UK residents
04:18 Outro & Summary

Disclaimer 🚨
⚪ All Defined Benefit (DB) pension transfer enquiries involving safeguarded benefits are handled
by an independent, FCA-regulated Pension Transfer Specialist (PTS) firm. We provide pension
and investment advice under the 2-adviser model but do not assess DB transfer suitability. The
PTS firm operates independently, and clients fall under its regulatory jurisdiction.
⚪ Content is for informational purposes only and does not constitute financial, investment, tax
(including for U.S. residents), or legal advice. Always conduct independent due diligence and
consult a professional adviser before making financial decisions.

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