Inheritance Tax

Do I pay UK tax on an inheritance from abroad?

Answered by Jordan Onraet-Wells, Founder & Chartered Tax Adviser (CTA). Published 17 August 2026. Last reviewed 17 August 2026.

The short answer

Normally no. UK inheritance tax is charged on the deceased's estate and paid by the executors, not by you as the beneficiary, and receiving an inheritance is not income. If the person who died lived permanently abroad and their estate held no UK assets, the estate itself is usually outside UK inheritance tax too, so nothing is due on either side. The answer changes in three situations: the estate includes UK assets, the deceased was a long-term UK resident within HMRC's 10-of-20-year test, or you look at what happens after you inherit, because income and gains the assets produce from that point are taxed on you in the normal way.

UK inheritance tax is a debt of the estate, settled by the executors before probate; beneficiaries do not pay tax simply for receiving a legacy.
An estate of someone who lived permanently outside the UK is broadly only within UK IHT on its UK-situated assets, and lighter excepted-estate reporting can apply where those are worth £150,000 or less.
UK assets such as property, bank accounts and company shares stay within UK IHT however long the deceased lived abroad.
Since 6 April 2025 the test is residence, not domicile: a deceased who was UK resident in at least 10 of the last 20 tax years is a long-term UK resident and their worldwide estate is in scope, with that status persisting for 3 to 10 years after leaving the UK.
Once the inheritance is yours, rent, interest, dividends and gains it produces are taxable on you as a UK resident in the normal way.

The tax falls on the estate, not on you

UK inheritance tax is charged on the value of the deceased's estate, and it is the executors who must report the estate and pay any tax, usually before they can even obtain the grant of probate, as our guide to probate and inheritance tax explains. There is no separate UK tax on receiving a legacy, and an inheritance is not income, so a lump sum arriving from a foreign estate does not go on your Self Assessment return as income. For a foreign estate, the estate side is often clean as well: where the person lived permanently outside the UK, broadly only their UK-situated assets fall within UK IHT, and where those UK assets are worth £150,000 or less the estate can qualify as an excepted estate with lighter reporting through the probate application rather than a full IHT400 account.

When UK IHT does reach a foreign estate

Two things pull a foreign estate into the UK net. First, UK assets are always in scope: a UK rental property, UK bank accounts and shares in UK companies stay within UK inheritance tax whoever inherits them and however long the deceased lived abroad. Second, since 6 April 2025 the gateway has been residence rather than domicile. If the person who died was UK tax resident in at least 10 of the last 20 tax years, they were a long-term UK resident under the residence-based IHT rules, and their entire worldwide estate is potentially chargeable, with that status persisting for between 3 and 10 years after they left the UK. So an inheritance from a parent who spent a career in the UK and retired abroad recently may be firmly within UK IHT, while one from a relative who never lived here usually is not. Cross-border estates should be checked case by case, because the excepted-estate conditions and the residence history interact.

Your own tax starts the day you inherit

What beneficiaries actually pay UK tax on is what happens after receipt. If you are UK resident, foreign rent from an inherited property falls within UK tax on foreign rental income, interest and dividends from inherited accounts are taxable as they arise, and if you later sell an inherited asset the growth is within UK Capital Gains Tax, including foreign property. Inheriting from abroad also tends to mean foreign accounts that HMRC will hear about through international data-sharing, so getting the reporting right from the first year matters. Horizon advises on cross-border estates and the UK filings that follow a foreign inheritance, with fixed fees agreed upfront.

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Sources and further reading

This is general information for the 2026/27 UK tax year, not personal tax advice; speak to a Chartered Tax Adviser about your own position.

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