Inheritance tax (IHT) is predominantly a tax on gifts of capital assets. It is most commonly associated with the death of an individual, but it can also be relevant to lifetime gifts (usually when a trust is created).
IHT is a tax on the donor (the person making the gift). In legal terms, when a person dies they are deemed to have given away all their assets. The IHT is then calculated with reference to the value of those assets. It is not a tax on the beneficiaries, and the status or wealth of the beneficiary will not usually affect the IHT due (although there are special provisions for spouses and children).
From 6 April 2025, the test for whether non-UK assets are in scope for IHT will be whether an individual has been resident in the UK for at least 10 out of the last 20 tax years immediately preceding the tax year in which the chargeable event occurs. Residence is determined by using the statutory residence test. Before 6 April 2025, a UK domiciled individual is subject
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Web page updated on 17 Mar 2025 13:12