Inheritance Tax British Expat UAE | UK IHT Advice | IFA Private Office

British expats in the UAE are often surprised to find they still face UK inheritance tax. Independent advice on IHT exposure and planning for expats across the Emirates.

Inheritance Tax British Expat UAE

Why British expats in the UAE are still exposed to UK inheritance tax

Moving to the UAE does not remove your exposure to UK inheritance tax. This surprises many British nationals who assume that leaving the UK means leaving the UK tax system behind. In the case of inheritance tax, it does not.

UK inheritance tax is based on domicile, not residence. If you were born in the UK, have spent most of your life there, and intend to return, you are almost certainly still UK domiciled. And if you are UK domiciled, your worldwide assets, including your UAE savings, investments and property, are subject to UK inheritance tax at 40 percent on everything above the nil rate band threshold.

How much inheritance tax could your estate face

The current nil rate band is £325,000. If you leave your home to direct descendants, an additional residence nil rate band of £175,000 applies, giving a combined threshold of £500,000 for an individual or £1 million for a married couple.

Above those thresholds, the rate is 40 percent.

For many British expats in the UAE who have accumulated property, investments and pension wealth during their careers, the potential inheritance tax liability is substantial. A British expat with a UK home worth £600,000, a pension worth £400,000 and investment savings of £200,000 could be looking at an estate worth over £1.2 million, with a potential inheritance tax liability approaching £280,000 or more under the April 2027 rules.

The April 2027 change

From April 2027, unspent pension wealth will be included in estates for inheritance tax purposes. This change significantly increases the inheritance tax exposure of British expats in the UAE who have accumulated substantial pension savings. It is one of the most important financial planning developments in a generation and it requires action before the change takes effect.

What can be done

There are legitimate, HMRC-approved strategies available to reduce inheritance tax exposure. These include making use of annual gift allowances, establishing trust structures, making pension nominations, using Business Property Relief where eligible, and in some cases taking steps to address domicile status. None of these are quick fixes and most require time to implement properly.

The most important first step is to understand your actual exposure. Most British expats in the UAE have never had a proper inheritance tax review. They do not know what their estate is worth for inheritance tax purposes or what their family would face.

How we help

IFA Private Office provides independent inheritance tax reviews for British expats across the UAE. We quantify your exposure, identify the available strategies, and help you implement them in coordination with UK-qualified specialists where required.

The first conversation is free.

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Ready to talk through your situation? Book a free consultation with IFA Private Office.