A different question from annual income tax
Since 6 April 2025, long-term UK residence has replaced the former domicile framework for determining the scope of overseas assets under inheritance tax. HMRC explains that overseas assets may remain exposed on a transfer or death even after the owner leaves Britain. This is an existing-law explainer, not a new tax announcement today.
For a family comparing Portugal, the UAE or Switzerland, an attractive destination income-tax result should therefore be accompanied by a separate estate review. Ask which assets, events and people each adviser’s conclusion covers. The location of a new home is only one fact in a much longer history.
Count tax years and check the departure history
HMRC’s manual describes the main test as UK residence in at least ten of the twenty tax years preceding the relevant tax year. For qualifying leavers, the continuing period depends on the residence history: ten to thirteen resident years generally produces three consecutive non-resident tax years; longer histories increase the period, up to ten.
The manual also says a split year counts as a full UK-resident year for this purpose. Transitional rules can change the result. Have the calculation checked against a year-by-year residence schedule rather than counting from the date of a flight or property purchase.
Trusts need their own review
HMRC’s April 2025 trusts newsletter explains that overseas trust-property treatment can depend on the settlor’s changing long-term residence status, subject to transitional provisions. It also identifies potential exit charges when property moves outside scope. A trust established before relocation is not automatically a finished planning exercise.
Before a proposed gift or trust change, ask the trustees and advisers to reconcile their assumptions. Keep the asset ownership, settlement documents and proposed transaction dates together so that the personal and trust analyses use the same facts.
A practical comparison for the family
Our editorial recommendation is a two-page briefing: one page showing the intended living pattern, the other showing the estate, ownership arrangements and events under consideration. Add an earlier-return scenario and identify which conclusions would need revisiting.
Do not turn the maximum ten-year period into a universal rule for everyone. The useful question is the period and consequences for this particular history, including any transitional treatment, rather than a single headline about escaping or retaining UK tax.