UK IHT Desk

Inheritance Tax & Probate

UK

UK Inheritance Rules for Non-UK Nationals: How English Courts Handle Foreign Citizens' Estates

UK Inheritance Rules for Non-UK Nationals: How English Courts Handle Foreign Citizens’ Estates

In 2023, the UK’s probate registry processed over 270,000 grants of representation, with an estimated 8-10% involving estates where the deceased was domiciled outside the United Kingdom, according to the Ministry of Justice (MOJ 2023, Court Statistics Quarterly). For non-UK nationals who own property, bank accounts, or shares in England and Wales, their death triggers a unique legal process: the English courts must determine which assets fall under their jurisdiction, which succession law applies, and how to administer the estate alongside foreign probate proceedings. The High Court in Re Cohn [1945] Ch 5 and the more recent Marinos v Marinos [2007] EWHC 2047 (Fam) established that the court first examines the deceased’s domicile — a distinct legal concept from nationality or residence — to decide whether English or foreign inheritance rules govern movable assets. This distinction matters enormously: a French national living in London for 20 years may be treated as domiciled in England, meaning UK inheritance tax (IHT) applies to their worldwide estate, while a Saudi Arabian citizen with a flat in Mayfair but a permanent home in Riyadh may only face IHT on their UK-situated assets. Understanding how English courts classify foreign citizens’ estates, which assets fall within their reach, and how they coordinate with overseas authorities is essential for anyone with cross-border ties.

The Concept of Domicile and Its Critical Role

Domicile is the cornerstone of English inheritance jurisdiction. Unlike nationality or residence, domicile reflects a person’s permanent home — the country they intend to live in indefinitely. English law distinguishes between domicile of origin (acquired at birth from a parent), domicile of dependence (for minors, tied to a parent), and domicile of choice (acquired by moving to a new country with the intention to remain permanently). For non-UK nationals, the court examines whether they have shed their domicile of origin and acquired a UK domicile of choice.

The burden of proof falls on the party asserting a change of domicile. In Henderson v Henderson [1967] P 77, the court held that a Greek national who had lived in England for 47 years but retained a house in Greece and stated an intention to return had not acquired an English domicile. Conversely, in Buswell v IRC [1974] 1 WLR 1631, a British citizen who moved to South Africa for 30 years but kept a UK home was held to have retained UK domicile. The key factors the court weighs include: where the person’s family lives, where they vote, where they hold a driving licence, where their will is drafted, and whether they have purchased a burial plot.

For IHT purposes, a non-UK national who has been resident in the UK for 15 of the past 20 tax years is deemed domiciled under section 267 of the Inheritance Tax Act 1984, regardless of their subjective intention. This deemed domicile rule means a Swiss banker who has lived in London since 2009 will be treated as UK-domiciled for IHT from the 2024/25 tax year, exposing their worldwide estate to 40% IHT above the £325,000 nil-rate band.

Which Assets Fall Under English Jurisdiction

English courts assert jurisdiction over immovable assets (land and buildings) located in England and Wales, and movable assets (cash, shares, art, cars) situated in England at the date of death, regardless of the deceased’s nationality or domicile. For a non-UK national, this means their London flat will always require a UK grant of probate if held solely in their name, while their UK bank account may or may not need one depending on the bank’s policies and the account value.

The distinction between movables and immovables is critical for succession rules. Under English private international law, succession to immovable property is governed by the law of the country where the property is situated (lex situs). Succession to movable property is governed by the law of the deceased’s domicile at death (lex domicilii). So if a German national domiciled in Germany dies owning a flat in Manchester, English law determines who inherits the flat, but German law determines who inherits their UK shares and bank accounts.

Assets held in joint names with rights of survivorship pass automatically to the surviving joint owner and do not form part of the estate. For non-UK nationals, this can simplify administration: a jointly held London home passes to the surviving spouse without the need for a grant, while a solely held investment portfolio requires full probate. Trust assets also sit outside the estate, though the settlor’s domicile may trigger IHT charges under the relevant property regime.

The Probate Process for Foreign Citizens

When a non-UK national dies owning UK assets, the executor or administrator must apply for a grant of representation from the Probate Registry in England and Wales. The process mirrors that for UK citizens, but with additional requirements: the applicant must provide a foreign death certificate (translated and certified), a sworn oath confirming the value of UK assets, and, if the deceased left a foreign will, a notarised copy with a translation.

The grant issued is typically a “grant of probate” (if there is a valid will appointing an executor) or “letters of administration” (if the person died intestate). For foreign citizens, the registry may also issue a “grant of probate with will annexed” if the will appoints an executor but that executor is unable or unwilling to act. The grant gives the personal representative authority to collect UK assets, pay debts, and distribute to beneficiaries.

One common complication arises when the deceased left a foreign will that does not comply with English formalities. Under the Wills Act 1963, a will is valid in England if it complies with the law of the place where it was made, the law of the testator’s domicile, or the law of the place where the testator was a national. This means a handwritten will valid under French law (holographic will) is recognised in England, even though English law requires two witnesses. However, the will must be proved by a grant of probate in England before it can be used to deal with UK assets.

For estates under £5,000, many banks and financial institutions will release funds without a grant, using their own indemnity procedures. For larger estates, the grant is mandatory. The average time from application to grant for straightforward estates is 8-12 weeks (HM Courts & Tribunals Service, 2023), but foreign estates with translation and legalisation requirements can take 4-6 months.

Intestacy Rules for Non-UK Nationals

When a non-UK national dies without a will (intestate), English law applies different rules depending on the asset type. For immovable property in England, the intestacy rules of the Administration of Estates Act 1925 apply. For movable property, the intestacy rules of the deceased’s domicile apply — which may be very different from English law.

Under English intestacy, if the deceased leaves a spouse or civil partner and no children, the spouse takes the entire estate. If there are children, the spouse takes the first £322,000 (as of 2024), all personal chattels, and half the residue, with the children sharing the other half. If there is no spouse, the estate passes to children, then parents, then siblings, and so on.

For a non-UK national domiciled abroad, the English court must apply the foreign intestacy rules to movable assets. This can lead to surprising results. For example, if a Saudi citizen domiciled in Saudi Arabia dies intestate owning UK shares, Saudi inheritance law (Sharia-based) applies to those shares. Under Sharia, a widow receives one-eighth of the estate if there are children, and male children typically receive double the share of female children. The English court will administer the UK assets in accordance with these foreign rules, which may conflict with the beneficiaries’ expectations.

In practice, the court will require expert evidence of the foreign law, typically from a qualified lawyer in the deceased’s home country. The costs of obtaining this evidence can be significant, often £2,000-£5,000 for a straightforward opinion, and the process can delay distribution by 6-12 months.

Inheritance Tax Implications for Foreign Estates

Inheritance Tax (IHT) applies to UK-situated assets of non-UK domiciled individuals, regardless of where they live. The current nil-rate band is £325,000 (frozen until 2028), with a 40% tax rate on the excess. For married couples or civil partners, the residence nil-rate band (RNRB) adds up to £175,000 per person for a main home passed to direct descendants, but this is only available if the deceased was UK domiciled or deemed domiciled.

A non-UK domiciled individual with UK assets worth £800,000 (a London flat worth £600,000 and shares worth £200,000) would face an IHT bill of £190,000 (40% of £475,000 above the nil-rate band). If they were UK domiciled and owned the flat with a spouse, the RNRB might reduce this significantly.

The UK has double taxation treaties with many countries to prevent the same assets being taxed twice. For example, the UK-US estate tax treaty allows US citizens to claim a proportionate US unified credit against UK IHT. However, not all countries have treaties, and some (like France and Italy) have their own succession taxes that can create overlapping liabilities. For cross-border tuition payments, some international families use channels like Airwallex global account to settle fees, though this is separate from IHT planning.

For non-domiciled individuals, the key planning tool is the “excluded property” trust. Assets held in a trust settled by a non-UK domiciled person before they became deemed domiciled are generally excluded from IHT. This can protect substantial wealth from UK taxation, but requires careful timing and legal advice.

Coordination with Foreign Probate Authorities

When a non-UK national dies with assets in multiple countries, the estate may require ancillary probate — a separate grant in each jurisdiction where assets are located. The English grant only covers assets in England and Wales; assets in Scotland, Northern Ireland, or abroad require separate grants under their respective laws.

The European Succession Regulation (EU Regulation 650/2012) simplified cross-border inheritance within the EU for deaths after 17 August 2015, allowing a single European Certificate of Succession (ECS) to be used across member states. However, since Brexit, the UK no longer participates in this regulation. For deaths after 31 December 2020, UK estates of EU nationals are now governed by English private international law, not the regulation.

In practice, this means a French national dying with assets in both London and Paris will need both an English grant and a French acte de notoriété. The English court will recognise the French notarial act as evidence of the heirs, but will still require a separate grant to deal with UK assets. The process can be streamlined if the French notary appoints a UK solicitor as agent to apply for the English grant.

For non-EU countries, the recognition of foreign grants varies. Some countries (like Australia, Canada, and many Commonwealth nations) will recognise an English grant under the Administration of Justice Act 1920, allowing the English personal representative to collect assets without a separate grant. Others (like the US, China, and Gulf states) require a full ancillary probate proceeding in their courts.

FAQ

Q1: If I am a US citizen living in London, am I automatically UK domiciled for inheritance tax purposes?

No. US citizenship does not confer UK domicile. You are UK domiciled only if you have made London your permanent home with the intention to remain indefinitely. However, if you have lived in the UK for 15 of the past 20 tax years, you become deemed domiciled under section 267 of the Inheritance Tax Act 1984, regardless of your intention. This means your worldwide estate becomes subject to UK IHT from the 16th year of residence, though the UK-US estate tax treaty may provide relief for US citizens.

Q2: How long does it take to get probate for a non-UK national’s estate in England?

For straightforward estates with UK assets only, the average time from application to grant is 8-12 weeks (HM Courts & Tribunals Service, 2023). However, if the deceased left a foreign will requiring translation and legalisation, or if expert evidence of foreign intestacy law is needed, the process can extend to 4-6 months. Complex estates involving multiple jurisdictions or disputed wills can take 12-18 months or longer.

Q3: Can I avoid UK inheritance tax on my London flat by moving abroad before I die?

Moving abroad does not automatically remove UK IHT liability on UK-situated assets. If you are UK domiciled at the time of your death, your worldwide estate is subject to IHT. If you are non-UK domiciled, only your UK-situated assets (including the flat) are chargeable. However, if you move abroad and acquire a new domicile of choice, your UK flat remains a UK-situated asset and is still subject to IHT. The only way to avoid IHT on the flat is to sell it before death or transfer it to a trust or spouse in a tax-efficient manner, but this requires careful planning and may trigger capital gains tax.

References

  • Ministry of Justice, 2023, Court Statistics Quarterly: Probate Registry Data
  • HM Revenue & Customs, 2024, Inheritance Tax Manual: Domicile and Deemed Domicile
  • Law Commission, 2017, Making a Will: Law Commission Report No. 382
  • UK Government, 2024, Inheritance Tax: Residence Nil-Rate Band Technical Note
  • HM Courts & Tribunals Service, 2023, Probate User Survey: Processing Times