Gibraltar was never the point
An excluded property trust works because of two things: where the assets sit and who the settlor is. Neither has anything to do with Gibraltar. HMRC's Inheritance Tax Manual puts it plainly: the status of the trustees and beneficiaries is not relevant. The one exception it gives is a qualifying interest in possession trust, where from 6 April 2025 the foreign property is excluded property only if the life tenant is also not a long-term UK resident. A Gibraltar trust company, a Jersey or Guernsey trustee, an Isle of Man or Cayman structure, all produce the same answer, because nothing in the test asks which jurisdiction the trust sits in. What the Gibraltar articles sold was a settlor who was not UK domiciled putting non-UK assets into trust before becoming deemed domiciled. That is the part that has gone. GOV.UK states that from 6 April 2025 the domicile and deemed domicile rules were replaced by long-term UK resident rules, so a page still describing a 15 of 20 year deemed domicile test is describing a test that was replaced on that date.
What the test is now
Since 6 April 2025 foreign settled property is excluded property at times when the settlor is not a long-term UK resident. A long-term UK resident is someone UK resident in at least 10 of the 20 tax years before the year of the chargeable event, and death counts as one. HMRC applies this to every settlement whatever its date: once the settlor is a long-term resident, assets they settled are not excluded property even if they went in while the settlor was non-resident or domiciled abroad. The old test looked at the settlor's domicile when the property went in; the new one looks at the settlor's status at each chargeable event. What survives is narrower. On death, GOV.UK says there is no inheritance tax on trust assets placed in the trust while you were non-UK domiciled, overseas on 30 October 2024 and overseas at your death. Property that was excluded property in the trust immediately before 30 October 2024 also gets a £5 million cap on relevant property charges per ten-year cycle, but UK assets and anything added after that date get none of it. Our guide to excluded property trusts after the 2025 reforms sets out the mechanics.
The three traps
The first is the settlor crossing 10 of 20. From that point the foreign assets stop being excluded property, and a ten-year anniversary falling while the settlor is a long-term resident carries a charge of up to 6%. The second is UK assets. A UK bank account or UK company shares in the trust are not foreign property, and HMRC's own example of a sterling account and later-added US shares shows that neither UK situs assets nor additions made after 30 October 2024 get the transitional protection. The third is the tail. Long-term resident status runs on after you leave the UK: 3 tax years if you were resident for 10 to 13 years, rising a year at a time to 10 tax years for 20, and a proportionate charge arises when the status finally ends, because the foreign property stops being relevant property at that point. Our IHT tail calculator shows how long your own tail runs. GOV.UK adds one duty that is easy to miss: tell the trustees when your long-term residence status changes, because separate trust charges may follow.
What Horizon does
A trust review from Horizon answers four questions: which year, if any, you cross or crossed 10 of 20; which assets in the trust are foreign property and which carry 30 October 2024 protection; what a ten-year anniversary or a departure would cost under the new rules; and what the trustees need to be told. It is specialist advisory work from £550, a single total agreed before work starts, never hourly. If you hold a Gibraltar or Channel Islands trust on advice that predates 6 April 2025, or you are moving to or from the UK with one, book a free clarity call and we will tell you whether the review is worth paying for. The wider position sits in our guides to residence-based inheritance tax, offshore trusts and UK tax and trusts and inheritance tax, and the short answer on what an excluded property trust is.