On 6 April 2025, the UK fundamentally changed the way inheritance tax is determined for people who live abroad. The centuries-old domicile-based system was abolished and replaced with a residence-based system. The phrase "non-dom" — which had defined British expat tax planning for two hundred years — no longer applies.
For British expats in Singapore with a long-term commitment to life outside of the UK, the inheritance tax picture can look very different from those who left more recently. Exceed ten tax years of non-UK residence in the last twenty, and your worldwide estate falls outside the scope of UK inheritance tax — only UK-situated assets remain in scope. It's a threshold that rewards careful, forward-looking planning.
This page explains what changed, who's affected, what your planning levers actually are under the new system, and the mistakes British expats are most likely to make.
If you have been UK tax resident for at least 10 of the previous 20 tax years, you are now what HMRC calls a Long-Term Resident (LTR), and your worldwide assets are within the scope of UK inheritance tax (IHT) at 40% above the nil-rate band (tax free allowance) — regardless of where you live now.
If you cease to be UK-resident, you do not immediately escape this. There is a "tail" period of continuing IHT exposure that depends on how long you were UK-resident in the first place. For those resident 20 years or more, the tail can extend up to 10 years.
The old non-dom regime, the deemed-domicile rules, and most of the trust planning that was used to manage IHT exposure pre-2025 can become either irrelevant or significantly weakened under the new system. New planning is needed for almost everyone affected.
Below: how the LTR test actually works, how the tail works, what your planning options are now, and where the most common mistakes are being made in the first 12 months under the new rules.
Under the previous system, UK inheritance tax exposure was driven by domicile — a complex legal concept inherited from English common law. A British person who left the UK with the intention of settling abroad could, over time, acquire a "domicile of choice" elsewhere and shed UK domicile. Once non-domiciled, only UK-situated assets were within scope of UK IHT.
That system has been abolished for inheritance tax purposes. From 6 April 2025, IHT exposure is determined by residence, specifically by whether you meet the test for being a Long-Term Resident (LTR).
The change matters in three specific ways:
Domicile is no longer the test. Whether you consider yourself UK-domiciled or non-domiciled is irrelevant for IHT going forward.
Worldwide assets become exposed once you are an LTR — there is no longer a "non-dom protection" for foreign-situated assets.
Excluded property trusts established before 6 April 2025 retain their pre-existing protection in many cases, but new excluded property trusts established after that date no longer offer the IHT shielding they once did. Existing arrangements need to be reviewed; new arrangements need fundamental rethinking.
You become a Long-Term Resident if you have been UK tax-resident for at least 10 of the previous 20 tax years. The test is rolling — it's reapplied each year against the previous 20 tax years, not fixed at a single point.
UK tax residence is itself determined by the Statutory Residence Test (SRT), which weighs days spent in the UK against various "ties" (family, accommodation, work). Please refer to our ‘Living Abroad – The Tax Rules’ guide for more details.
Most British expats in Singapore are clearly non-resident under the SRT once their primary employment, home, and family are based in Singapore — but edge cases exist for people who travel back to the UK frequently or maintain UK accommodation. Determining whether you've been UK-resident in any given year is not always obvious; it requires a careful read of the SRT against your specific pattern of UK days and ties.
Once you meet the 10-out-of-20 test, you are an LTR and your worldwide estate is in scope. You remain an LTR until enough years of non-residence have accumulated to bring you back below the threshold.
The test only looks at the previous 20 tax years — UK residence further back than that does not count. The implication: if you have been continuously non-UK-resident for 10 or more tax years, you cannot be an LTR, regardless of how long you spent in the UK before that.
Becoming non-resident does not immediately end your LTR status. The new rules introduce a tail period during which IHT exposure continues, calibrated to how long you were UK-resident.
As a rough guide:
If you were UK-resident for 10 to 13 years, the tail is shorter — typically 3 years of continued IHT exposure after you cease to be UK-resident.
If you were UK-resident for 14 to 19 years, the tail is longer.
If you were UK-resident for 20 years or more, the tail can extend up to 10 years.
For long-term British expats in Singapore who have been non-UK-resident for 5 to 10 years, the tail period is the most important number in the planning conversation. Some are approaching the end of their tail and within sight of falling out of LTR status; others have almost a decade to go. The strategy is fundamentally different in each case.
The other complication is that the LTR clock is not a one-way street. If you return to the UK and become resident again, the years stack back up. People who plan to retire to the UK eventually need to understand that any period of UK residence later in life can re-trigger LTR status and reset the tail.
Singapore does not levy estate duty, inheritance tax, or any equivalent. The Singapore-side picture is clean. What's changed is the UK-side picture, and that's where the planning attention now sits.
Three typical client situations illustrate the range:
British, left the UK 12 years ago, now a Singapore PR, owns a Singapore HDB or condo, has a UK pension and some legacy UK investments. Because they have been continuously non-UK-resident for 12 of the previous 20 tax years, they are below the 10-year LTR threshold and have acquired non-LTR status. Their worldwide estate sits outside UK IHT scope, with only their UK-situated assets (the UK pension under the post-April 2027 rules, and any UK property or investments) remaining in scope. The planning conversation here is the inverse of what people often expect: the new rules can be good news for long-term expats. The priorities are (a) confirming the non-LTR position with proper care to the Statutory Residence Test for any UK days in the previous 20 years, (b) reviewing existing wills and trust structures that were drafted under the old domicile-based framework and may no longer achieve what was intended, and (c) understanding the implications of any future return to the UK, which would re-trigger the LTR clock.
British, left the UK 4 years ago, now in Singapore on an Employment Pass, planning to stay 5 to 10 more years before potentially returning to the UK. With 16 of the previous 20 tax years spent UK-resident, they are unambiguously an LTR, and their worldwide estate is in scope of UK IHT at 40% above the nil-rate band. The question is what to do during their Singapore window to manage exposure both during the window itself and into any subsequent return to the UK — and how the timing of return affects whether they re-stack LTR years or fall out of LTR status before going back.
British, left the UK in the past 1 to 3 years for Singapore. With 17 to 19 of the previous 20 tax years spent UK-resident, firmly an LTR, with the longest possible tail ahead of them if they ever cease to be UK-resident permanently. The most important planning conversation is around lifetime gifting, the use of the seven-year potentially exempt transfer rules, and life cover for the residual exposure.
Most of the structures and strategies that defined British expat estate planning before April 2025 (non-dom status, excluded property trusts established offshore, situs-based asset structuring) are either no longer relevant or significantly weakened. The remaining levers are different and arguably narrower, but they are real.
The seven-year rule for potentially exempt transfers (PETs) survives the reforms. Gifts made more than seven years before death fall outside the estate entirely; gifts made between three and seven years before death can attract taper relief. Annual exemptions (the £3,000 annual gift allowance, the small gifts and wedding gift exemptions) all continue. For expats with significant estates who are within their tail period, structured lifetime gifting is the most powerful single tool — and the earlier it starts, the more effective it is.
Whole-of-life cover written in trust does not solve the IHT problem, but it pays the tax bill for your beneficiaries. For expats with illiquid estates (property, for example) where the IHT bill would otherwise force a sale, life cover written in trust provides liquidity outside the estate. Premiums become a substitute for the tax — predictable, in your control, and arrangeable while you are healthy enough to qualify.
Trust planning is significantly more constrained than it was. New excluded property trusts no longer offer the IHT shielding they once did for an LTR settlor. Pre-April 2025 trusts retain meaningful protection in many cases, but the position is fact-specific and a specialist review is warranted. Trusts can still play a role in succession planning, asset protection, and managing distributions — but they should no longer be relied on as a primary IHT-mitigation strategy for new arrangements.
If you plan to return to the UK in retirement, the timing matters. Returning after the tail expires means you are starting from a clean residence position (with the FIG regime potentially available to shelter foreign income and gains for the first four years — see below). For people in their late tail period, an extra 12 to 24 months in Singapore before returning can have meaningful tax consequences.
Following the October 2024 Budget, most UK pensions become subject to UK inheritance tax from April 2027. This is a separate change but interacts with the LTR rules: if you are an LTR with a substantial UK pension, that pension goes from being IHT-exempt to fully in scope. For some people this fundamentally changes the case for pension drawdown timing, the use of beneficiary nominations, and the case for crystallising and reinvesting pension funds outside the pension wrapper.
Alongside the LTR reforms, the UK introduced the Foreign Income and Gains (FIG) regime for people newly arriving in the UK. The FIG regime replaces the old remittance basis and provides a four-year window during which a new UK arrival can receive foreign income and foreign gains free of UK tax — provided they have not been UK-resident in the previous 10 tax years.
For British expats in Singapore who are planning to return to the UK after a long period abroad, the FIG window is a meaningful planning consideration. Realising gains, crystallising deferred income, and timing certain distributions to fall within the four-year window can produce material tax savings. The window is short and starts when you arrive, so the planning is best done before the move rather than after.
1
It does not. The non-dom regime ended on 5 April 2025 for IHT purposes. Anyone basing current planning on "I'm non-domiciled" is working from an obsolete framework. The first review under the new rules should ask: am I an LTR, and if so, when does my tail end?
2
New offshore trusts established post-April 2025 by an LTR settlor may not offer the IHT protection they once did. Anyone considering a new trust as an IHT-mitigation strategy should first satisfy themselves that the structure achieves what it is designed to achieve under the current rules.
3
Pre-April 2025 trusts retain meaningful protection but the rules around them have changed in subtle ways — particularly around additions to existing trusts, IHT exit charges, and the treatment of trustee distributions. A specialist trust review is warranted for anyone with existing offshore structures.
4
Many British expats have wills drafted under the old domicile-based framework, with reasoning built around shedding UK domicile. Those wills should be reviewed in light of the new rules to ensure the dispositions still achieve what was intended.
5
The most common misconception is that ceasing to be UK-resident immediately removes IHT exposure. It does not — the tail can be substantial, particularly for those with long UK residence histories. Plan for the tail, not just the headline LTR status.
UK inheritance tax planning under the post-April 2025 regime sits at the intersection of cross-border tax, financial planning, and estate planning. It requires an adviser who understands all three and can take an integrated view across UK rules, Singapore residency, and the client's actual life plans.
A product-led adviser will tend to recommend whichever product they sell — typically a life policy or an offshore investment bond — regardless of whether it is the right tool. A planning-led adviser asks first what the client is actually trying to achieve, models the LTR position properly, looks at lifetime gifting and pension timing alongside life cover, and recommends what fits the picture rather than what fits the brochure.
Obsidian's approach is the second one. As a Chartered Financial Planner, my professional obligation is to recommend what's actually right for you. For complex estate-planning matters that need specialist input — solicitors for trust drafting, UK-qualified tax Advisers for written advice and implementation, Obsidian works alongside specialist partners rather than pretending to do it all in-house.
The first conversation is a no-obligation 30 minute discussion.
For IHT planning specifically, that conversation typically covers your UK residence history, the rough scope of your estate (UK and worldwide), where you sit on the LTR clock, what your tail looks like if you ceased to be UK-resident today, and the planning opportunities most likely to be relevant in your situation.
By the end of the call you'll have a clear sense of the size and shape of your IHT exposure, when it diminishes, and what — if anything — you should be doing now to manage it. Whether you decide to engage Obsidian for the planning work afterwards is up to you.
Obsidian Financial Planning is a trading name of Sam Barrie, who is an Appointed Representative of Synergy Financial Advisers Ltd (UEN 201217738K), licensed by the Monetary Authority of Singapore. The information on this page is general in nature, reflects rules and HMRC guidance current at the time of publication, and does not constitute financial, tax, or legal advice. UK tax law in this area continues to evolve and personal circumstances vary; you should not act on any of the above without taking specific advice on your situation. Tax treatment depends on individual circumstances and may be subject to change.
