Illustrative tool
April 2027 rule changeFrom 6 April 2027, most unused UK pension funds fall inside the IHT estate for the first time, a change now legislated in Finance Act 2026. Estimate your exposure below, in under 60 seconds.
Illustrative only, not financial advice. Your figures stay in your browser and are never stored or transmitted; we collect only anonymous usage statistics.
The Inheritance Tax Illustrator is a free tool that estimates the UK Inheritance Tax exposure on an estate using current HMRC thresholds: the nil-rate band of £325,000, the residence nil-rate band of up to £175,000, and, from 6 April 2027, most unused UK pension funds now legislated in Finance Act 2026. It is designed for internationally mobile UK nationals who want a quick, adjustable estimate of their IHT position before discussing options with a regulated specialist. Figures are illustrative only and are not financial advice.
Your estate
Adjust the inputs below to estimate your IHT position.
Property, savings, investments, and other assets (excluding pensions).
From 6 April 2027, unused pension funds will be included in your IHT estate for the first time.
RNRB (£175,000) applies when left to direct descendants.
Doubles the available nil-rate allowances. The £2m RNRB taper threshold is unchanged.
↓ Adjust inputs below to update
Lost to Inheritance Tax
£400,000That is 27% of your estate going to HMRC instead of your family.
How this is calculated
Your estate may face a significant IHT liability.
Gifting strategies, trust structures, and residence review could all change this position, but they take time to work. A specialist can model what is still open to you.
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Illustrative only, not financial advice.
Concerned about your IHT exposure?
Residence history, gifting, and estate structure can all affect the real number. A specialist can model your actual position.
Complimentary introduction, no commitment, no fees, your details are never auto-forwarded.
Last reviewed 2 July 2026. Thresholds reflect current HMRC guidance; the pension change is legislated in Finance Act 2026 and takes effect 6 April 2027. See HMRC's technical note on Inheritance Tax on pensions.
Questions
Common questions about inheritance tax for expats
What is UK inheritance tax and does it apply to expats?
UK inheritance tax (IHT) is charged at 40% on the value of a deceased person's estate above the nil-rate band (currently £325,000). For expats, scope now depends on long-term UK residence rather than domicile. Even if you have lived abroad for some years, you may still be subject to UK IHT on worldwide assets during a tail period after leaving, and UK-situated assets, including most unused UK pension funds from 6 April 2027, remain in scope regardless.
What is the nil-rate band and the residence nil-rate band?
The nil-rate band (NRB) is £325,000 per person: assets up to this value pass free of IHT. The residence nil-rate band (RNRB) is an additional threshold of up to £175,000, available when a residential property is passed to direct descendants. Married couples and civil partners can combine both allowances, potentially sheltering up to £1 million.
How does residence (formerly domicile) affect my UK inheritance tax position?
Domicile used to determine IHT scope, but from 6 April 2025 the UK moved to a residence-based test. You are treated as a long-term resident if you were UK tax resident for at least 10 of the previous 20 tax years; long-term residents are within UK IHT on worldwide assets, and that status can persist for between 3 and 10 years after leaving the UK, depending on how long you were resident. If you are not a long-term resident, only UK-situated assets are in scope. Your personal position depends on your residence history, so it is one to confirm with a specialist.
What options exist around inheritance tax exposure for expats?
Various planning routes exist, including gifting assets during your lifetime (subject to the seven-year rule), using trusts, Business Relief qualifying assets, or reviewing your long-term residence position with professional advice. Which, if any, is appropriate depends on your specific situation, family structure, and the jurisdictions involved. An estate planning specialist can help you assess the options.
Visit our full FAQPlanning involving gifts, residence review, and estate structure takes time to work properly. A specialist can help you understand what may be available before the rules take effect.