Up to 4.8 million British-born people living overseas may need urgent reviews of their inheritance tax exposure as Britain tightens the rules around internationally mobile individuals, warns Nigel Green, CEO of global financial advisory giant deVere Group.
The warning comes as sweeping changes overhaul how the UK assesses inheritance tax liability, with further reforms from April 2027 expected to pull pension wealth into the inheritance tax net for the first time.
“A huge number of Britons abroad still believe leaving the UK automatically protects them from inheritance tax,” comments Nigel Green.
“For many people, this assumption is becoming dangerously outdated.”
For decades inheritance tax exposure relied heavily on the concept of domicile — a complex legal framework linked to permanent home intentions and long-term family ties.
From April 2025, however, the UK moved toward a residence-based regime centred on “long-term UK residence.”
Under the new framework, individuals can potentially remain exposed to UK inheritance tax on worldwide assets if they were UK tax resident for at least 10 out of the previous 20 tax years.
Exposure can also continue long after somebody leaves Britain.
Depending on previous UK residency history, former residents may remain within the inheritance tax net for up to 10 tax years after departure.
“Many expats think their UK tax exposure ends the moment they move overseas,” Nigel Green says.
“It doesn’t.”
The changes carry major implications for British retirees abroad, internationally mobile executives, business owners and expats with substantial UK pension wealth.
Pressure is expected to intensify further from April 2027.
Current government plans will bring most unused pension funds and pension death benefits into inheritance tax, marking one of the biggest changes to UK estate planning in years.
Defined contribution pensions have historically been viewed as one of the most inheritance-tax-efficient structures available to British savers because they often sat outside the taxable estate on death.
This position is changing.
“The government is moving directly toward pension wealth,” notes the CEO.
“A lot of people overseas still believe pensions automatically sit outside inheritance tax. In many cases, that will no longer hold.”
Under the planned framework, unused pension pots and certain pension death benefits could face 40% inheritance tax.
Some beneficiaries may also face income-tax liabilities depending on how pension assets are inherited.
The potential impact stretches across SIPPs, private pensions, workplace defined contribution schemes, drawdown arrangements and uncrystallised pension funds.
deVere warns the risks become even more complex for Britons living in countries with separate inheritance and succession systems.
Spain applies inheritance and succession taxes. France operates forced-heirship rules. Different jurisdictions also treat pension wealth differently following death, increasing the risk of overlapping tax exposure and cross-border estate conflicts.
“International families are entering a much tougher planning environment,” Nigel Green explains
“Old non-dom assumptions and older pension-planning strategies no longer work the way many people think they do.”
He says Britons abroad should urgently review their years of UK tax residence, date of departure from Britain, pension structures, wills across jurisdictions, beneficiary nominations and possible inheritance tax exposure after 2027.
Nigel Green concludes: “Britain is tightening the inheritance tax net around internationally mobile individuals.
“And the window for action is closing fast.
“Millions of people overseas may not yet realise how exposed they could still be.”
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