UK Inheritance Tax Rules to Apply to Most Non-UK Pensions from April 2027
UKPulse Money Desk
Individuals classed as long-term UK residents will have all their assets, regardless of location, subject to UK inheritance tax rules. This will include most non-UK pensions starting April 2027.
- Long-term UK residents will have all assets, including those overseas, subject to UK inheritance tax.
- Most non-UK pensions will be included under these rules from April 2027.
- A long-term resident is defined as someone resident in the UK for tax purposes for 10 of the previous 20 years.
UK inheritance tax rules will apply to all assets of individuals classed as long-term UK residents, regardless of where those assets are located. This will extend to include most non-UK pensions from April 2027.
A long-term resident is defined as someone who has been resident in the UK for tax purposes for 10 of the previous 20 years. For these individuals, overseas assets may also qualify for standard inheritance tax allowances and exemptions.
Any assets left to a spouse will be exempt from inheritance tax. Money left to other family members can benefit from the nil-rate band tax-free allowance, which is up to £325,000. If the individual dies before their spouse, any remaining allowance can be inherited by the spouse.
Why this matters: This change means that individuals with overseas assets, particularly non-UK pensions, will need to consider UK inheritance tax rules in their estate planning.
What this means for you: If you are a long-term UK resident with assets or a pension outside the UK, these assets will be subject to UK inheritance tax rules, with non-UK pensions included from April 2027.