Expat Inheritance Tax Planning
The Importance of IHT Planning for UK Domiciles
HMRC collected £7.5 billion in inheritance tax in 2023/24, a record high. With the nil-rate band frozen at £325,000 since 2009, more British estates are drawn into scope every year, including those held by expats living abroad.
Effective Inheritance Tax (IHT) planning is crucial for UK domiciliaries, ensuring your estate is passed on efficiently to your loved ones. At Paratus, we help clients understand and navigate IHT planning, protecting your wealth from unnecessary tax liabilities.
Why IHT Planning Matters for UK Domiciles
Minimise Tax Burden:
Reduce the impact of inheritance tax on your estate.
Protect Your Legacy:
Work to structure your estate so wealth is positioned to pass to your beneficiaries.
Optimised Planning:
Take advantage of exemptions, reliefs, and other strategies to reduce IHT exposure.
Estimate Your Inheritance Tax Exposure
Before any conversation with a Paratus adviser, it helps to understand what your estate may currently be exposed to. Our IHT calculator gives you a working estimate based on your asset values, your domicile status, and the current nil-rate band thresholds. It takes under three minutes. Once you have a figure, our team can help you explore whether any planning considerations may be relevant to your situation.
40%
Standard IHT rate above the threshold
£325,000
Nil-rate band per individual
£500,000
With the residence nil-rate band
Maximum combined allowance for married couples
£1,000,000
Our Expertise
What a structured IHT plan looks at
01
Nil-Rate Band and Residence Relief
Understanding your available thresholds is the starting point for all IHT planning. The standard nil-rate band sits at £325,000. Additional relief may be available through the Residence Nil-Rate Band, depending on your estate and how it is structured.
02
Domicile Status and Worldwide Exposure
Domicile is distinct from residency. As an expat, you may retain UK domicile even after many years abroad, meaning your worldwide assets could remain within scope of UK IHT. Reviewing your domicile position is a critical first step.
03
Structured Gifting and Seven-Year Rules
Assets transferred during your lifetime may fall outside your estate after seven years, subject to HMRC rules. We help you explore whether a structured gifting programme could form part of your broader estate planning approach.
04
Trust Arrangements
Certain trust structures can help position assets outside your taxable estate while still reflecting your wishes for how those assets are used and distributed. We work through the options relevant to your personal circumstances.
05
Life Assurance Written in Trust
A life assurance policy written in trust can be positioned to meet an IHT liability when it arises, without requiring your executors to sell assets. This is one of the most practical tools available in estate planning.
06
Cross-Border Succession Complexity
Living abroad adds layers of complexity. Different countries operate their own succession and estate laws, which may interact with your UK IHT position. We help you map the full picture across jurisdictions.
Charitable Legacy Planning
Gifts to UK registered charities are exempt from IHT. Estates with charitable donations of 10% or more of the net estate may qualify for a reduced IHT rate of 36%. We help you explore whether charitable giving aligns with your estate planning objectives.
07
Your IHT Planning Journey
Every client starts with a conversation, not a commitment. Here is what working with us looks like.
Initial Conversation
Estate and Exposure Review
Ongoing Partnership
Planning Discussion
We start with a no-obligation call to understand your situation: where you live, where your assets are held, and what is on your mind. There is no paperwork and no pressure.
We work through your estate with you, mapping your assets, reviewing your domicile position, and helping you understand your current IHT exposure and where the key planning opportunities may sit.
Based on your review, we explore the approaches that may be relevant to your circumstances, from gifting strategies and trust structures to cross-border considerations. You leave with clarity, not a sales pitch.
IHT planning is not a one-off exercise. Your circumstances change, legislation changes, and your estate evolves. We stay alongside you with regular reviews to ensure your planning remains appropriate.
500+
Clients supported in planning their cross-border estate
Regulated
Our advisory business operates under numerous licences
Qualified
Our advisers are independently qualified financial planners, not tied to any provider or institution
Global
Advising British expats and internationally mobile professionals wherever they are based around the world
Further Reading and Resources
Whether you are at the start of your planning journey or revisiting your position after a change in circumstances, the following may be useful.
Inheritance Tax FAQs for Expats
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