Inheritance Tax Manual

IHTM13032 - Other domicile issues: domicile of life tenant/settlor and exclusion from charge to Inheritance Tax

From 6 April 2025, for inheritance tax purposes, domicile is replaced by long-term UK residence and you can find details of these rules at IHTM47000 and IHTM47050. 

When considering foreign property in a settlement, whether fixed interest or discretionary before 6 April 2025, it is the domicile of the settlor(s) that determines whether the property is excluded from the charge to Inheritance Tax (IHT) (see IHTA84/S48 (3)(a) and IHTM27220).

Generally, the domicile of the life tenant (or class of beneficiaries) does not affect the IHT payable on foreign settled property (though their foreign free estate may be excluded property).