Experts say the government’s introduction of a residence-based taxation system could see long-term expats escape being hit by 40% inheritance tax (IHT).

Under the new system, effective from 6 April 2025, IHT will apply to worldwide assets for individuals who have been UK tax residents for at least 10 out of the last 20 tax years.

However, British expats who fall outside this threshold will generally escape IHT on non-UK assets, provided they meet certain conditions.

This means as long as they have been non-resident for at least 10 out of the past 20 tax years, their non-UK assets, such as property, savings, and investments, will no longer be subject to 40% IHT.