UK inheritance tax changes: questions raised over impacts for Britons in France
Full implications are still being assessed by legal experts
The worldwide estates of some people moving abroad remain subject to UK inheritance tax under the new rules
Andrzej Rostek/Shutterstock
Recent changes to UK inheritance tax rules concerning so-called ‘long-term residents’ have prompted questions about their potential significance for people moving to France.
At first sight, the reforms are most likely to affect those who moved from the UK after April 6, 2026, although some other people could also fall within the new ‘long-term resident’ definition, which affects liability to UK inheritance tax.
The full implications are still being assessed by legal experts with whom The Connexion works, and we will return to the subject in the coming weeks.
Fortunately, France is one of only a handful of countries to have a specific inheritance tax treaty with the UK, which, on our initial assessment, may shield people who have clearly established France as their main home, as it includes wording saying that such people’s estates are only liable to UK inheritance tax on UK assets.
In summary, the UK has historically used two overlapping concepts of tax residency and domicile.
Residency relates to how long you spend in the country in the tax year and where you have the strongest personal, family and work ties.
Domicile is broader and relates to the country you consider your permanent home over the course of your life.
It has abandoned the domicile concept moving forward and, for inheritance tax, has introduced ‘long-term residency’.
It may apply to estates of people who were a UK tax resident in the previous 10 years or for 10 years or more in the previous 20.
The worldwide estates of ‘long-term residents’ may be liable to UK inheritance tax, the rules say.
However, this does not apply if you did not have UK domicile status on October 30, 2024, and if you were also a non-resident in the UK tax year 2025-2026 and if you do not return to the UK.
Usually, under the established rules governed by the UK–France inheritance tax treaty, once Britons become permanently established in France and are considered fiscally domiciled there for treaty purposes, France may assess inheritance tax on their worldwide estate. The UK will generally only retain taxing rights over certain UK-situated assets, notably UK real estate. Where both countries tax the same asset, relief is available under the treaty to prevent double taxation.
