Tax tip: All change for excluded property trusts

All change for excluded property trusts.

From 6 April 2025 based on the government’s most recent proposals and draft legislation domicile will no longer be relevant for tax purposes. For inheritance tax an individual’s IHT liability will be based on their long-term residence in the UK. A person who has been resident in the UK for ten out of the last 20 years so is long-term resident will be liable for IHT on worldwide assets.

Many non-UK domiciled individuals have established excluded property trusts (EPTs). These are invested in overseas investments and are currently outside the IHT net even if the settlor is a beneficiary. From 6 April if the settlor is a long-term UK resident the trust will be brought within the relevant property regime with potential ten-year anniversary and exit charges applying. EPTs established before 30 October 2024 will not...