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Residence-based IHT system from 6 April 2025 ― overview


Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
tag-icon Autumn Budget 2024

Residence-based IHT system from 6 April 2025 ― overview


Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
tag-icon Autumn Budget 2024
imgtext

This guidance note provides an overview of the changes to the inheritance tax system in the UK from a domicile based system prior to 6 April 2025 to a residence-based IHT system for events on and after this date.

Position before 6 April 2025

The current position is as set out in the Domicile for UK inheritance tax guidance note.

New rules

The new rules will apply from 6 April 2025 and draft legislation has been released. As would be expected for such a fundamental change, this is a very long piece of draft legislation at 103 pages. HMRC have also published Technical Note: Reforming the taxation of non-UK domiciled individuals which contains useful detail and case studies.

In addition, the remittance basis of taxation will be abolished and replaced with a time-limited foreign income and gains (FIG) regime. See the Abolition of the remittance basis from 2025/26 guidance note for further details.

Domicile will still exist as a common law concept but will have no impact

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  • 19 Feb 2025 12:12

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