Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Inheritance tax definition

What does Inheritance tax mean? Inheritance tax describes the taxation of wealth transfers on death and, in defined cases, on lifetime gifts and trust transfers. In the UK (England & Wales, Scotland and Northern Ireland), Inheritance Tax is a statutory regime under the Inheritance Tax Act 1984, charged at rates up to 40% on transfers of value. It is usually payable from the deceased’s estate by personal representatives. Lifetime charges arise on chargeable lifetime transfers (typically gifts into most trusts) and where a donor dies within seven years of a potentially exempt transfer. Key features include the nil-rate band and, where conditions are met,...

UK IHT treatment of offshore trusts before 6 April 2025: EPTs, formerly domiciled residents, UK residential property, RPR/IIP charges, GROBs, situs and debt restrictions [Archived]

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Practice notes

This Practice Note is archived and no longer maintained.

STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime

The Finance Act 2025 (FA 2025), which obtained Royal Assent on 20 March 2025, ends the remittance basis of taxation and brings in a residence-based system from 6 April 2025. FA 2025 also makes domicile no longer the decisive factor when assessing Inheritance tax liability.

Amendments to the rules defining Excluded property status
Abolition of protected settlements status for offshore trusts
Revisions to overseas workday relief

For details on these changes, see Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26. See also: Finance Bill Tracking Service: Key dates (Finance Bill 2025) and Finance Act 2025.

This Practice Note reflects the law as it stands up to 6 April 2025. From 6 April 2025, the definition of an Excluded property trust changes and the concept of formerly domiciled residents is being removed. Consequently, many of the provisions outlined below and much of the guidance given will no longer apply from that date...

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Web page updated on 22/05/2026

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