Inheritance tax after you leave the UK: the long-term resident rules
For decades, UK inheritance tax on worldwide assets turned on a test about where you belonged, and it was hard to shed. That changed on 6 April 2025. Inheritance tax on worldwide assets now depends on how many years you have lived in the UK, which makes the effect of a move to Dubai far easier to predict. This guide sets out the rules as they stand at October 2026.
The long-term UK resident test
You are a long-term UK resident if you were UK resident in at least 10 of the previous 20 tax years (GOV.UK). Residence here means residence for income tax and capital gains tax, year by year: the Statutory Residence Test from 2013-14 and the older rules before that. A split year counts as a full year of UK residence (IHTM47020).
If you are a long-term UK resident, your worldwide estate is within UK inheritance tax: your Dubai flat, your UAE company shares, overseas investments and UK assets alike. If you are not, only your UK assets are.
Most people moving from the UK to Dubai have lived in the UK for well over 10 years, so they start as long-term UK residents. The question is how long that status lasts after they leave.
Inheritance tax leaving the UK: how long the tail lasts
Once you become non-resident, you do not drop out of the test at once. Your past years of residence keep you inside it for a period called the tail. As at October 2026, HMRC’s rules set the tail by how many years you were UK resident (IHTM47020):
| Years of UK residence (of the previous 20) | Tail after you leave |
|---|---|
| Fewer than 10 | No tail: not a long-term UK resident |
| 10 to 13 | 3 tax years |
| 14 | 4 tax years |
| 15 | 5 tax years |
| 16 | 6 tax years |
| 17 | 7 tax years |
| 18 | 8 tax years |
| 19 | 9 tax years |
| 20 | 10 tax years (the maximum) |
A founder who has lived in the UK all their adult life and moves to Dubai has a 10-year tail. Someone who came to the UK for work 12 years ago and now moves on has a 3-year tail. Transitional rules apply to some people who became non-resident in the 2025-26 tax year, so check GOV.UK if that is you.
Three examples
A founder who has lived in the UK all their life. They were UK resident in all of the previous 20 tax years, so their tail is 10 tax years. For the first 10 tax years after they become non-resident, their Dubai property, their UAE company and their overseas investments are all within UK inheritance tax, as well as anything they keep in the UK.
A professional who came to the UK 12 years ago. They have 12 years of UK residence in the last 20, which gives a tail of 3 tax years. After that, only their UK assets stay within UK inheritance tax.
A couple with different histories. One partner grew up in the UK and has a 10-year tail. The other moved to the UK 8 years ago and is not a long-term UK resident at all, so only their UK assets are within UK inheritance tax. Each partner’s estate is assessed on their own history, which matters when you decide who owns what. The spouse exemption is also capped for gifts from a long-term UK resident to a partner who is not one (IHTM47030).
The tail resets only after 10 years away
The test resets after 10 consecutive tax years of non-residence. If you return to the UK after that, only the year you return and later years count (GOV.UK). Until then, your earlier UK years still count. If you return while your tail is still running, you remain a long-term UK resident. If your tail has run out, you can become one again as early as the tax year after you return, because the years before you left are still in the 20-year window (IHTM47020). Our guide to moving back to the UK from Dubai covers the other return traps.
What stays in UK inheritance tax regardless
Your residence status decides whether your non-UK assets are within UK inheritance tax. UK assets stay within it whatever your status. For a Dubai mover that usually means:
- UK property, including a former home you now let (see UK rental income once you live in Dubai)
- UK bank and savings accounts
- shares in UK companies and UK-held investments (holdings in authorised unit trusts and OEICs are an exception: HMRC treats them like non-UK assets)
People often keep these after they move. Each one keeps part of your estate in the UK system for as long as you hold it.
Pensions join the estate from April 2027
From 6 April 2027, most unused pension funds and death benefits come into the estate for inheritance tax, under the Finance Act 2026. Personal representatives report and pay the tax. Death-in-service benefits from registered pension schemes are out of scope (GOV.UK).
For many people leaving the UK, the pension is their largest asset after property. If you are still within the tail, or the pension counts as a UK asset, the change can bring it into the inheritance tax calculation. Read what happens to my UK pension if I move to Dubai and QROPS vs QNUPS before you decide anything; a pension transfer is a regulated advice decision.
Inheritance tax and the UAE
The UAE’s published list of taxes covers corporate tax, VAT and excise tax, with no inheritance tax (u.ae). That does not remove UK inheritance tax: during your tail, and on UK assets, the UK charges as it would if you still lived there. The UAE is not among the 10 countries with which the UK has an inheritance tax treaty (IHTM27161).
The UAE has its own succession rules for UAE assets, and a will registered in the UAE lets you set out how your UAE assets pass. That is a separate question from tax, and worth settling early. See UAE wills and inheritance planning for expats.
Inheritance tax planning before and after you leave
- Work out your tail. Count your UK-resident tax years in the last 20 and read off your tail from the table above. That is your planning horizon.
- List your UK assets. Decide which ones you will keep after you move, because they stay within UK inheritance tax.
- Check your partner separately. Each person has their own residence history and their own tail.
- Look again at trusts and gifts. The April 2025 rules also changed how trusts are treated, with the settlor’s long-term residence status now relevant. That needs specialist advice.
- Plan for the pension change. If your pension is a large part of your estate, factor April 2027 into when and how you draw it.
- Make wills in both places. A UK will for UK assets and a registered UAE will for UAE assets keeps the estate moving.
Mistakes we see
- Assuming the move ends inheritance tax. It does not for the tail years, and never for UK assets.
- Counting calendar years. The test counts UK tax years of residence for income tax purposes, not years on a calendar or years with a UK address.
- Forgetting the return. Coming back within 10 years can keep you a long-term UK resident, or make you one again soon after you return.
- Leaving the pension out. From April 2027 it can sit inside the estate.
How we help
Our UK and UAE tax service works out your residence history, your tail and which assets stay within UK inheritance tax, with a UK-registered tax adviser. If you have already moved, the Clean Break Review gives you a clear read on where you stand.
Questions people ask
Do I pay UK inheritance tax if I leave the UK?
Leaving does not end it straight away. If you were a long-term UK resident, meaning UK resident in at least 10 of the previous 20 tax years, your worldwide estate stays within UK inheritance tax for a tail after you leave. Assets in the UK stay within UK inheritance tax even after the tail ends.
How long does the inheritance tax tail last after leaving the UK?
As at October 2026, the tail is 3 tax years if you were UK resident for 10 to 13 of the previous 20 tax years. It grows by 1 year for each extra year of residence, up to a maximum of 10 tax years, which applies once you have 20 years of residence. Transitional rules apply to some people who became non-resident in 2025-26.
Do non-residents pay UK inheritance tax?
On UK assets, yes: UK property, UK bank accounts and other UK-situated assets stay within UK inheritance tax whatever your residence. On non-UK assets, a non-resident pays UK inheritance tax only while they are still a long-term UK resident, which covers the tail years after leaving.
Does where I was born still decide UK inheritance tax?
No. For inheritance tax from 6 April 2025, the test is long-term UK residence, based on the number of tax years you were UK resident in the previous 20. Where you were born or intend to live permanently no longer decides it.
What happens if I return to the UK?
Your earlier years of UK residence still count towards the 10-in-20 test. If your tail has not run out when you come back, you are still a long-term UK resident; if it has, you can become one again as early as the tax year after you return. The count resets only after 10 consecutive tax years of non-residence: return after that and only the year you return and later years count.
Are pensions included in inheritance tax after I leave?
From 6 April 2027, most unused pension funds and death benefits come into the estate for UK inheritance tax, under the Finance Act 2026, and personal representatives report and pay the tax. Death-in-service benefits from registered schemes are out of scope. Whether your pension is caught after you move depends on your long-term residence status and where the pension is.