The rule changed while you were abroad
On 6 April 2025, the UK replaced the old domicile and deemed domicile basis for Inheritance Tax with a long-term residence test. That date matters to British expats because leaving the UK, changing a mailing address and becoming resident in the UAE do not, by themselves, answer the UK IHT question anymore.
The new core test is numerical. A person is a long-term UK resident for IHT purposes if that person was UK tax resident for at least 10 of the previous 20 tax years. When the test is met, non-UK assets enter the UK IHT net. That means a Dubai apartment, a UAE bank account or other overseas property can be relevant to the UK calculation even though the asset is nowhere near the UK.
Then there is the tail. Long-term residence status can continue for up to 10 tax years after departure, depending on the residence history. Moving to Dubai may start a new chapter in daily life. It does not produce a clean tax answer on the day the flight lands.
HMRC explains the post-2025 test and its effect on overseas property in its guidance on Inheritance Tax for long-term UK residents. The same guidance makes another awkward point: overseas assets in a trust can also be within scope when the settlor is a long-term UK resident. A trust is not an automatic exit from the residence test.
The first step is rebuilding the residence record tax year by tax year, before any estate estimate.
The 10-year tail, described without guessing
People understandably ask how many years abroad are enough. The departure date is only one date in a 20-tax-year record, followed by a tail that can last up to 10 tax years. The HMRC manual on the long-term residence test shows why the number of years since departure cannot safely become a personal conclusion. Three descriptive profiles make the point.
These are profiles, not rulings. Anyone offering a personal yes or no from the departure year alone is skipping the record that the rule actually tests.
Profile 1: left the UK 2 years ago
This person has spent two years in Dubai after a substantial period in the UK. Two years abroad cannot yet show ten non-resident years, so the tail question is live. The adviser needs to count the UK tax-resident years in the relevant 20-year window and then apply the post-departure rules. If the 10-out-of-20 test is met, non-UK assets may sit inside the UK IHT analysis during the applicable tail.
Profile 2: left the UK 8 years ago
Eight years feels long enough to make the UK connection look historical. At eight years out, the ten-of-twenty window still spans UK years, so the record decides. The adviser must identify how many UK tax-resident years fall into the relevant test, whether the person met the long-term residence condition and whether any part of the tail remains relevant.
Profile 3: left the UK 15 years ago
Fifteen years is longer than the maximum 10-tax-year tail described by HMRC. That is useful context, not a tax opinion. The residence record still has to establish which rules apply to the relevant event. A London property does not become a UAE asset because its owner has lived in Dubai for 15 years.
Whether this is you is a question for your UK tax adviser: the test is residence history, and only your record answers it.
UK assets never leave the UK net
The residence test controls whether non-UK assets come into the UK IHT scope. It does not remove UK assets from that scope. GOV.UK guidance for people based outside the UK gives property and bank accounts in the UK as direct examples.
That distinction is easy to lose in a mixed estate. A British expat may have a Dubai home, an account in the UAE, a UK rental property and money with a UK bank. The UAE move changes where the person lives. It does not change the location of the UK property or the UK account.
So the analysis has two steps:
- Put UK-situs assets into the UK IHT review regardless of residence.
- Use the long-term residence test and any applicable tail to determine whether non-UK assets also enter that review.
The asset map and the residence record are the only inputs that settle both steps.
The £325,000 and £175,000 bands are still relevant
The ordinary nil-rate band is £325,000. The residence nil-rate band is £175,000 where a qualifying residence passes to direct descendants. For qualifying estates, that can produce up to £500,000 of combined bands for one person. With transferred unused bands, the qualifying estate of the surviving spouse or civil partner can reach £1 million.
Those figures do not mean every British expat has a £500,000 allowance. The residence band is conditional, and the available result depends on the estate. The bands also answer a different question from the residence test. First establish which assets are within scope. Then the UK adviser applies the available bands and any other relevant treatment.
The £325,000 nil-rate band and £175,000 residence nil-rate band are frozen through the 2029-30 tax year under the GOV.UK thresholds measure.
The UAE side controls succession to UAE assets
UK IHT asks what the UK may tax. UAE succession law asks who can receive UAE assets and through which local process. Those are separate questions.
For non-Muslims, Federal Decree-Law No. 41 of 2022 provides the civil personal status framework for inheritance and wills. A registered UAE will allows a non-Muslim expat to direct UAE assets according to the instructions in that will. UAE real estate remains governed by UAE law under Article 17 of the Civil Transactions Law, which is why a Dubai property needs local attention even when a UK document exists.
The practical route then matters. DIFC and ADJD use different registry systems, paperwork and fees. This article does not own that comparison, so use the separate guide to decide whether DIFC, ADJD or Dubai Courts could fit the UAE estate.
A registered UAE will does not reduce UK IHT. It gives the UAE side a local succession instrument.
The Two Nets: tax scope and succession are different jobs
The cleanest way to think about a British expat estate is to draw two nets over the same asset list.
| The UK tax net | The UAE succession net | |
|---|---|---|
| Core question | Which assets are within UK IHT scope? | Who receives the UAE assets, and through which registered route? |
| Main input | UK tax residence in 10 of the previous 20 tax years, any applicable tail, plus UK-situs assets | The UAE asset list, family instructions and the registered UAE will route |
| What it can catch | UK assets regardless of residence, plus non-UK assets when the long-term residence rules apply | UAE assets governed and transferred through the UAE succession process |
| Adviser needed | UK tax adviser, with the full residence record | UAE process coordination |
| What it does not answer | It does not decide how a Dubai asset moves through the UAE process | It does not decide or reduce UK IHT |
Someone will ask: if the UK may tax the Dubai asset, why bother with a UAE will? Because a tax charge and a transfer process are different problems. The UK net can ask whether the value is taxable. The UAE net still asks who is entitled to the local asset and what authority allows it to move.
A UK tax adviser may conclude that the tax side is simple. Sometimes it genuinely is. It still does not answer the succession route for a Dubai flat. In the other direction, a perfectly registered UAE will does not settle the UK tax analysis.
One asset can sit in both nets for different reasons.
Your UK will cannot be assumed to work here
Whether a UK will is recognised in the UAE cannot be assumed; use the four-gap test for foreign wills in the UAE before relying on it.
Where SmartWills stops and the UK adviser starts
SmartWills coordinates the UAE side. That means making the UAE asset picture legible, identifying the appropriate UAE registry question and keeping the existence of the UK plan visible while the local process moves. Any UAE will document is prepared through the SmartWills process and reviewed by UAE-licensed partner lawyers.
SmartWills is not a law firm. It does not decide whether someone is a long-term UK resident, calculate an IHT liability, advise on UK trusts or tell a UK solicitor how to structure a UK will.
The UK tax adviser owns:
- the residence record, tax year by tax year
- the 10-out-of-20 test and the applicable tail
- the treatment of UK and non-UK assets for IHT
- the nil-rate band, residence nil-rate band and personal tax calculation
- the UK treatment of any trust in the estate plan
The UK solicitor owns the UK document and its interaction with the wider estate plan. Both UK professionals should see the UAE asset list and the intended UAE route. The UAE side should also know that a UK will exists, because documents written in isolation can create a coordination problem.
That boundary is deliberate. The objective is a clean handoff, not UAE process guidance dressed up as UK tax advice.
If the Italian side of a cross-border estate is also relevant, the sibling guide explains the same two-system problem for UAE and Italian inheritance. Other nationalities are being added to the UAE inheritance by country index as each guide goes live.
Primary sources and update record
- GOV.UK: Inheritance Tax if you are a long-term UK resident
- HMRC manual: the long-term residence test and tail
- GOV.UK: IHT when someone based outside the UK dies
- GOV.UK: nil-rate band and residence nil-rate band measure
- UAE Legislation: Federal Decree-Law No. 41 of 2022
- UAE Legislation: Civil Transactions Law
- UAE Government: taxation overview
Last updated: 23 July 2026 · Changelog: 2026-07-23: first published.
Frequently asked questions
Does my UAE will reduce UK IHT?
No. A UAE will controls instructions and process for the UAE assets it validly covers. UK IHT scope is determined separately by UK rules, including the long-term residence test, the tail and the continuing treatment of UK-situs assets. The UAE document can make succession clearer without changing the UK tax result.
Is the £325,000 threshold still frozen?
Yes. The ordinary nil-rate band is £325,000, and the residence nil-rate band is £175,000 where a qualifying residence passes to direct descendants. GOV.UK confirms both figures through the 2029-30 tax year. The second band is conditional, so £500,000 is not a universal threshold for every estate.
Does the UAE tax inheritance?
The UAE Government taxation overview lists the taxes the UAE levies: VAT, excise and corporate tax. Income tax is not levied on individuals. An inheritance or estate tax is not among the taxes listed. What heirs deal with in the UAE is court process and transfer costs, not an estate tax bill.
That does not cancel tax elsewhere. A British expat's estate may still need a UK IHT analysis under the residence and asset rules described above.
Is my UK will enough for my Dubai flat?
Do not assume it is: check whether a home-country will is recognised in the UAE against the four gaps.
Should I tell my UK solicitor about my UAE will?
Yes. The UK solicitor should know that a UAE will exists, which assets it is intended to cover and which UAE route is being used. The UAE-side team should know about the UK will too. The point is coordination between documents, including the wording that controls their territorial scope, not one document silently replacing another.
What changed on 6 April 2025 exactly?
The UK replaced domicile and deemed domicile as the main basis for the IHT scope of non-UK assets with the long-term UK residence rules. The core test looks for UK tax residence in at least 10 of the previous 20 tax years. When that condition applies, non-UK assets can fall within IHT scope, and the condition can persist for up to 10 tax years after leaving. UK assets remain in scope regardless of residence.
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