UK Wills with Overseas Assets

The fundamental question: domicile

Before anything else, you must understand your domicile — because it determines the scope of your UK IHT exposure more than any other single factor.

Domicile is a legal concept distinct from nationality, residence, or tax residence. Put simply, it is the country you consider your permanent home — the country to which you intend to return if you go away, and which you have no settled intention of leaving permanently.

There are three types:

Domicile of origin: Acquired at birth, usually from your father (for those born in wedlock under English law). It is extraordinarily difficult to lose — more so than most people expect.

Domicile of choice: Acquired when you settle permanently in a new country with the intention of remaining there indefinitely. Merely living somewhere for many years is not sufficient — you must also have abandoned your domicile of origin. The courts have consistently found this a high bar to satisfy.

Deemed domicile: Even if you are not legally domiciled in the UK, if you have been UK-resident for 15 of the previous 20 tax years, you are treated as deemed UK domiciled for IHT purposes. This catches many long-term UK residents who consider themselves non-domiciled.

UK domicile — what it means for IHT

If you are domiciled (or deemed domiciled) in the UK, you are subject to UK IHT on your worldwide assets. This includes:

• UK property of all types
• Overseas property (a villa in Spain, an apartment in New York)
• Foreign bank accounts and investments
• Overseas business interests
• Overseas pensions (some exclusions apply)

The full value of your worldwide estate is assessed against the UK’s nil-rate band (£325,000) and residence nil-rate band (£175,000 where applicable), and IHT is charged at 40% on the excess. If your overseas assets are also taxed in the country where they are situated, double taxation relief may be available — see below.

Non-UK domicile — a different set of rules

If you are genuinely non-UK domiciled (and not deemed UK domiciled), UK IHT applies only to your UK-sited assets. Your overseas assets fall outside the UK IHT net.

What counts as a UK-sited asset?

• Land and property in the UK
• Shares in UK-registered companies (wherever the share certificate is held)
• Bank accounts at UK branches of banks
• UK government stock (gilts)
• Business assets situated in the UK

What is not a UK-sited asset?

• Bank accounts at foreign branches
• Shares in foreign companies
• Overseas property

The spouse exemption for non-doms: If a UK-domiciled person is married to a non-UK domiciled person, the inter-spouse exemption is limited to £325,000 on transfers to the non-dom spouse. The non-dom spouse can elect to be treated as UK-domiciled for IHT purposes — which restores the unlimited spouse exemption but exposes worldwide assets to UK IHT.

Do you need a separate will for overseas assets?

Possibly — and this is one of the most important practical questions for anyone with assets in more than one country.

The case for a separate foreign will:

• Many countries only recognise wills in their local language and complying with local formal requirements
• Foreign probate (called by various names — ‘homologation’ in France, ‘exequatur’ in Spain, etc.) can be slow and expensive if executed using only a UK will
• A separate local will dealing only with local assets avoids the need for local courts to interpret a UK document and can speed up the administration significantly

The case against separate wills:

• Multiple wills create the risk of one will revoking another if not carefully drafted
• Coordination between executors in different jurisdictions is complex
• Costs can accumulate

The EU Succession Regulation (Brussels IV)

Since August 2015, the EU Succession Regulation (known as Brussels IV) has governed which country’s law applies to EU-situated estates. Its key feature is that it allows you to elect for the law of your nationality to govern your entire EU estate — rather than the law of the country where the asset is situated.

Practical impact: A British national with a property in France can, by making an express election in their will, choose for English law (rather than French law) to govern the succession of that property. This is particularly significant because France has forced heirship rules (réserve héréditaire) which give children an absolute entitlement to a portion of the estate — English law has no such rules.

Property in France, Spain, and other EU countries

France:

• French succession law applies to French immovable property unless a Brussels IV election to English law is made
• French notaires handle the succession process (not UK solicitors/executors)
• French inheritance taxes (droits de succession) apply to French property — rates vary dramatically depending on the relationship between deceased and beneficiary
• A double taxation treaty between the UK and France may reduce or eliminate double taxation
• French wills (testament olographe or acte notarié) are available and may be appropriate

Spain:

• Similar considerations apply — Spanish succession law and succession taxes (Impuesto sobre Sucesiones y Donaciones) apply to Spanish property
• Regional variations in Spanish succession tax are significant (rates vary dramatically between regions such as Madrid vs Valencia)
• Brussels IV election to English law available
• Spain has no double taxation treaty with the UK on inheritance taxes — relief is available only under unilateral UK relief

Italy, Portugal, Germany, and others:

• Each EU member state has its own succession law, forced heirship rules, and succession tax regime
• Brussels IV elections are available throughout
• Separate local wills are generally advisable

Property in common law jurisdictions (US, Australia, Canada)

United States:

• The US has both federal estate tax and state-level estate taxes (which vary widely)
• UK-US double taxation convention on estates applies and provides relief from double taxation
• A US will (or revocable living trust) is often advisable for US assets
• US probate procedures vary by state — some states (California, for example) have notoriously slow and expensive probate processes; a revocable trust can avoid probate entirely

Australia:

• No inheritance tax in Australia (abolished in 1979)
• Probate is required for Australian assets using a UK will, or a separate Australian will can be used
• Careful coordination required to avoid conflicts between documents

Canada:

• No federal inheritance tax (though capital gains tax applies on death)
• Provincial probate fees vary
• A separate Canadian will for Canadian assets is common practice

Overseas bank accounts and investments

Overseas bank accounts do not automatically become accessible to your executors — each country’s banking system has its own rules about releasing funds to foreign executors.

Key practical steps:

• Keep a record of all overseas accounts with the institution’s name, account numbers, and the procedure for notifying death
• Understand whether a grant of probate from England and Wales will be recognised — in some jurisdictions it will be; in others, a local equivalent is needed
• Consider whether joint accounts or survivorship arrangements are appropriate for specific overseas accounts

Investment accounts held through international platforms (Interactive Brokers, Schwab International, etc.) may have their own succession procedures — check the terms with each provider.

Double taxation treaties

The UK has double taxation conventions on inheritance taxes with the following countries (among others): France, India, Ireland, Italy, Netherlands, Pakistan, South Africa, Sweden, Switzerland, and the United States.

Where a treaty applies, relief is usually given by one country ceding taxing rights on certain assets to the other, or by allowing a credit for foreign tax against the UK IHT liability.

Where no treaty applies, the UK provides unilateral relief for foreign taxes paid on the same assets — though the mechanics differ from treaty relief and the outcome may be less favourable.

What to tell your executors

Overseas assets create complexity for executors who are unfamiliar with foreign legal systems. Your will — and ideally a separate Letter of Wishes — should give your executors:

• A list of all overseas assets with sufficient detail to identify and locate them
• The names and contact details of any overseas advisers (notaire, attorney, accountant)
• Details of any overseas wills (where they are stored, who holds the original)
• Any relevant foreign account numbers, safe deposit box details, or property title references
• Your domicile position and the basis on which it has been determined

Frequently asked questions

I live in the UK but was born in another country — am I UK domiciled for IHT purposes?

Not necessarily. Your domicile of origin follows your father’s (under English law), and you may have retained that domicile even if you have lived in the UK for many years. However, if you have been UK-resident for 15 of the previous 20 tax years, you are deemed UK domiciled for IHT purposes regardless of your legal domicile. This requires detailed analysis of your specific facts.

My French holiday home — will it be subject to both French succession tax and UK IHT?

Potentially yes, unless the UK-France double taxation treaty provides relief. The treaty generally allocates taxing rights to France for French immovable property, with the UK giving credit. The result depends on the specific values and your overall estate position. Professional advice is essential.

Can I use a trust to remove overseas assets from my UK estate?

Trusts can be effective for overseas assets, but the rules are complex and depend on your domicile, the type of trust, and the nature of the assets. Non-domiciled individuals have historically had access to excluded property trust planning — the rules here have been significantly tightened from April 2025 and advice on existing structures should be sought urgently.

My will was written before Brexit. Does it still cover my EU assets properly?

Brexit did not invalidate existing wills, but it changed the legal context in ways that may affect your EU assets. In particular, Brussels IV applies to EU assets regardless of Brexit, and a Brussels IV election in your will to English law is still effective. However, if your will was written before 2015, it predates Brussels IV entirely and should be reviewed.

I have a property in the US. Do I need a US will as well?

A separate US will (or revocable living trust) is generally advisable for US real estate. The US probate process can be time-consuming and costly, particularly in states like California. A revocable living trust can avoid probate entirely. Consult a US-qualified attorney alongside your UK adviser.

What is the difference between residence and domicile?

Residence is where you physically live — it is primarily relevant for income tax and capital gains tax purposes. Domicile is a deeper concept: the country you consider your permanent home and to which you intend to return. You can be resident in the UK but domiciled elsewhere, or vice versa. For IHT, domicile (not residence) is the key test.