Does inheritance tax apply to UK property owned by non-domiciled owners?

A non-domiciled individual owning UK residential property directly has always been within UK inheritance tax on that property, since situs, not domicile, determines whether an asset is UK property for this purpose, unlike the position for non-UK assets of a non-domiciled owner.

Since April 2017, shares in an overseas close company, or an interest in an overseas trust, that derive their value from UK residential property are also treated as UK property for inheritance tax, so routing ownership through an offshore holding structure no longer removes the property from the UK inheritance tax net.

On death, the value of the UK residential property, or the relevant proportion of shares or trust interests deriving value from it, is included in the death estate calculation, potentially triggering UK inheritance tax at 40% above the available nil rate band, alongside any tax due in the owner's home country.

Lifetime gifts, loans used to fund the purchase, and mortgages secured on the property can all affect the calculation, and double tax treaties with an estate or inheritance tax article can sometimes provide relief where the same value would otherwise be taxed twice, so this area benefits from specific advice for higher-value holdings.

Our fixed monthly packages for a UK limited company start at £89 plus VAT and run to £169 and £289 plus VAT as bookkeeping, VAT, payroll and reporting are added. One-off filings are sold at fixed prices, and the Companies House fees we pay for you are charged at cost with no VAT added. Overseas owners are quoted on exactly the same published prices as UK-resident clients.

Rates, thresholds and deadlines here reflect the 2026/27 UK position and current Companies House and HMRC guidance. Check GOV.UK, or ask us, before relying on them for your own company.