Is your overseas trust still outside UK inheritance tax?
Since April 2025 a trust's non-UK assets are outside UK inheritance tax only while the settlor isn't a long-term UK resident. See where your trust stands and what it could pay.
Your answer
Tell us about the trust and the settlor to see where it stands.
About this calculator
For people who set up a trust abroad, and their trustees and families, who want to know whether its non-UK assets are still outside UK inheritance tax after the April 2025 changes.
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How it’s worked out
Since 6 April 2025, a trust's non-UK assets are outside UK inheritance tax (excluded property) only while the settlor is not a long-term UK resident: UK resident in fewer than 10 of the last 20 tax years. It's tested each time a charge could arise, not when the trust was made. After someone leaves the UK they stay long-term resident for 3 to 10 tax years. If the settlor has died, their position at death fixes the trust's for good (before 6 April 2025, the old domicile test applies). UK assets, including UK homes held through an overseas company, are never outside.
While the non-UK assets are in (relevant property), the trust pays up to 6% every 10 years, and an exit charge when they leave, including when the settlor stops being long-term resident. When the settlor becomes long-term resident, there's no charge that day, but the next 10-year charge falls on the non-UK assets too, reduced for the quarters before. For trusts set up before 30 October 2024 by someone who wasn't UK domiciled, charges on the non-UK assets are capped at £5 million every 10 years (£125,000 a quarter in the first period from April 2025). We assume a discretionary trust, today's values, the trust's full £325,000 tax-free amount and no earlier gifts by the settlor.
Worked example
The trust's non-UK assets are inside UK inheritance tax (relevant property): the next 10-year charge, on 1 June 2030, is about £52,763.
Set up before 30 Oct 2024 · Settlor in the UK · 12 of 20 years · Discretionary trust
| UK-resident tax years, of the 20 | 12 |
|---|---|
| Long-term UK resident now (10 of 20) | Yes |
| Non-UK assets now | Inside (relevant property) |
| UK assets: always in UK inheritance tax | £0 |
| Value at the 10-year anniversary, 1 June 2030 | £2,000,000 |
| Less the trust's tax-free amount | − £325,000 |
| 10-year rate (6% of the value above it, as a share of the whole) | 5.03% |
| 10-year charge on UK assets | £0 |
| Non-UK assets: quarters of the cycle as relevant property | 21 of 40 |
| 10-year charge on non-UK assets | £52,763 |
| Cap on charges for non-UK assets settled before 30 October 2024 | £2,500,000 |
| Next 10-year charge | £52,763 |
Based on HMRC's long-term UK residence rules for trusts from 6 April 2025, the 10-year and exit charges, and the cap for trusts set up before 30 October 2024.
Questions people ask
What if the settlor can benefit from the trust?
If the settlor is a long-term UK resident when they die, the non-UK assets also count in their estate (a gift with reservation of benefit), on top of the trust's own charges. Trusts set up before 30 October 2024 by someone who wasn't UK domiciled are protected from this for assets that were in them then. A benefit only for a spouse doesn't count.
Does the trust pay when the settlor becomes long-term resident?
No. The non-UK assets come into the trust charges from that day, and the next 10-year charge is cut by a fortieth for each quarter of the 10 years before then. The charge comes when the settlor stops being long-term resident, as the assets leave again.
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