A new framework for inheritance tax

From 6 April 2025, the UK reformed the way Inheritance Tax (IHT) is applied. The shift marked a move away from the historic focus on domicile status towards a residence-based approach. For internationally mobile families, this means that extended periods of residency in the UK may now bring worldwide assets within the scope of IHT. While UK situated assets remain chargeable as before, the change broadens the potential exposure of overseas property, investments, and business interests. The precise detail of how the legislation applies will depend on individual circumstances and the statutory rules that define UK residence for tax purposes. This makes careful, forward-looking planning carried out with qualified specialists more important than ever.

Why the change matters

For wealthy families with property and investments spread across multiple jurisdictions, the reform has several implications:

Global exposure: Overseas assets may be considered within the taxable estate once an individual is regarded as a long-term UK resident.

Succession complexity: Wills, trusts, and succession arrangements drafted under the previous rules may need to be reviewed to ensure they remain effective.

Liquidity pressures: Families with illiquid overseas assets such as property or private companies should anticipate how future IHT obligations could be funded.

Trust and fiduciary oversight: Existing structures remain legitimate tools, but transparency and compliance are critical.

These considerations reflect the practical implications of the revised statutory framework and underscore the importance of structured, compliant planning.

How families are responding

The reform has prompted many high-net-worth families to take measured, lawful steps to ensure continuity:

Estate reviews: Mapping global assets and modelling scenarios under the new rules.

Updating legal documents: Reviewing wills, succession plans, and trust deeds so that they remain aligned with personal objectives and compliant with the law.

Liquidity planning: Identifying transparent, regulated funding sources so obligations can be met without distress sales.

Professional administration: Ensuring trustees, executors, and fiduciaries operate under clear mandates with strong compliance processes.

Cross border coordination: Seeking advice in all relevant jurisdictions to prevent conflicting outcomes.

These actions reflect a prudent focus on preservation, clarity, and full compliance within the evolving framework.

Broader context: transparency and global standards

The move to a residence-based IHT framework reflects a wider global trend towards transparency and standardisation. International initiatives such as the Common Reporting Standard (CRS) already mean that financial accounts are routinely reported across borders. In this environment, documentation, disclosure, and demonstrable compliance are not optional. They are essential. Families that plan transparently and in partnership with regulated advisers are best placed to preserve value for future generations.

The Alpha Wealth perspective

Alpha Wealth does not provide tax advice. Our role is to collaborate with leading tax specialists, independent legal experts, and fiduciaries to create robust, multi-jurisdictional wealth structures. Alpha Wealth brings together the right advisory teams, models cross-border exposures under the latest rules, and implements succession strategies that are both resilient and transparent. Our approach emphasises sustainable, long-term solutions designed to preserve and grow asset management for future generations.

Final thoughts

The 2025 inheritance tax reform highlights how quickly the rules of wealth management can evolve. For families with significant assets, especially those with international links, the question is not whether to plan but how to do so in a way that is fully compliant and resilient. Early, structured, and transparent planning led by experienced professionals is the surest path to preserving wealth and ensuring that family legacies endure. For some, carefully integrating international banking arrangements or considering citizenship by investment as part of a broader framework may also play a role in long term planning when structured with clarity and compliance.

Disclaimer

This article is provided for general informational purposes only. It does not constitute tax, legal, or financial advice. Alpha Wealth does not provide tax advisory services and always works in partnership with professional experts. Readers should seek independent specialist advice before making decisions relating to inheritance tax or wealth structuring.