When someone who was not a long-term UK resident dies – or, for deaths before 6 April 2025, was non-UK domiciled – while holding UK assets, the UK IHT reporting requirements can be difficult to understand. We’ve outlined these requirements in this article, including why reporting may still be required even when no IHT is due. In particular, we focus on how the reporting rules apply to “excepted estates” in these circumstances.

What makes someone long-term UK resident?

From 6 April 2025, the UK moved away from the domicile-based system and now determines an individual’s exposure to IHT by reference to long-term UK residence (LTR). An individual is treated as a LTR after they’ve been UK-resident for at least 10 of the previous 20 UK tax years, before the date of death. Their residency is assessed using the UK’s Statutory Residence Tests.

This new test replaced the former domicile-based rules entirely. Under the previous regime, an individual was ‘deemed domicile’ in the UK after they’d been UK resident for 15 of the previous 20 UK tax years.

What are the reporting requirements for IHT?

If you’re a personal representative (PR), such as an Executor or Administrator, of the estate of a person who was a non-UK LTR – or, for deaths before 6 April 2025, was non-UK domiciled (non-dom) – you will usually be required to complete IHT400, a 16 page form with more than 20 possible additional schedules to report the value of the estate to HM Revenue & Customs (HMRC).

Only the value of the UK assets held, or deemed to be held, by the non-UK LTR/non-dom at the date of death is chargeable to IHT. However, if the value of the UK estate is low enough to meet the criteria of an ‘excepted estate’ the IHT reporting requirements are sometimes reduced to a two-page form – IHT207.

As a PR, you have 12 months after the death to complete and submit form IHT400/IHT207 or risk penalties for late filing. If IHT is due, you need to pay HMRC by the end of the sixth month after the non-UK LTR/non-dom died. After this date, interest accrues on the overdue IHT until it’s paid.

The reporting requirements for IHT purposes are separate from probate applications. It is possible that you’ll be required to report an estate without the need to apply for probate. For example, if the estate consists of a UK bank account which is jointly owned, the account may automatically transfer by survivorship, which means the account might be transferred to the other owner without the need for probate. However, in this situation, PRs may still need to file an IHT form. Therefore, it’s important to understand the separate requirements for probate applications and IHT reporting, to avoid delays in obtaining the grant or failing to report to HMRC by the deadline.

Excepted estate rules: guidance and examples for Non-UK LTR/non doms

What is an excepted estate?

An estate can only be classified as an excepted estate if no IHT is due.

Where IHT is due, form IHT400 is required. However, even where no IHT is due, there’s still a reporting requirement if the non-UK LTR/non-dom died holding UK assets. The key question is whether the estate must be reported on form IHT400, or whether the shorter form IHT207 can be used instead.

To meet the criteria and qualify as an excepted estate, all the following conditions must be met by the non-UK LTR/ non-dom at the date of death:

• The gross value of their UK assets must not exceed £150,000; and

• Their UK assets only consisted of cash/quoted stocks and shares; and

• They were never LTR/UK (deemed) domiciled for IHT purposes.

However, even if the non-UK LTR/non-dom’s estate meets the criteria and qualifies as an excepted estate, the PR will still need to report to HMRC using IHT400 if the deceased was born in the UK, lived in the UK during their lifetime, or made any gifts of UK assets within seven years of death.

What should PRs do when dealing with a non-UK LTD/non-dom estate?

If you need to obtain probate to sell or transfer the UK assets of a non-UK LTR/non-dom’s estate, you will need to submit an IHT400 or an IHT207 form to HMRC before submitting the probate application. The Probate Office will not issue grants for non-UK LTR/non-dom estates until they receive clearance from HMRC, so using the wrong form is likely to cause unnecessary delays to the process.

The IHT reporting requirement is separate from the probate application so, even where probate isn’t required, you will still need to submit either an IHT400 or an IHT207 to HMRC for a non-UK LTR/non-dom if they held UK assets when they died.

If no IHT is due, but the non-UK LTR/non-dom held UK assets other than cash or quoted stocks, and shares, when they died – such as real estate property or shares in privately owned companies – the PR you will need to submit form IHT400, even if the value of those UK assets does not exceed £150,000.

If no IHT is due and the estate qualifies as an excepted estate, PRs should still check whether the non-UK LTR/non-dom was born in, or ever lived in the UK, or made any gifts of UK assets within seven years of death, before completing an IHT207, instead of an IHT400. This will help avoid unnecessary delays in obtaining probate.

As a PR of a non-UK LTR/non-dom, it’s important to understand that even if an estate qualifies as an excepted estate, there’s still a requirement to report to HMRC using either form IHT400 or form IHT207. An estate being excepted does not mean it is exempt from the reporting requirements.

Still unsure of which IHT form to use?

Below are examples of excepted estates involving non-UK LTR/non-doms, to demonstrate when PRs are required to file an IHT400 and when it is possible to submit an IHT207 instead.

Example one

Adam died domiciled in Australia, where he’d lived and been domiciled all of his life. His estate was predominantly based in Australia and was worth £140,000 in total. However, he owned a plot of land in the UK valued at £50,000. Because Adam’s UK estate consists of assets other than cash and quoted investments, his PRs will be required to submit an IHT400.

Example two

Beatriz was born in Brazil where she lived and had been domiciled for all her life. Her estate consists of her Brazilian residence worth £300,000; her Brazilian bank account had a balance of £20,000 and she owned shares in a UK company listed on the London Stock Exchange worth £30,000. She’d not made any gifts during her lifetime. Although Beatriz’s estate is worth over £150,000, the UK element is only valued at £30,000 and therefore within the threshold to qualify as an excepted estate. Because she’s never been LTR/(deemed) domiciled in the UK and her UK estate consists of only quoted shares, Beatriz UK estate qualifies as an excepted estate. As she wasn’t born and had never lived in the UK, or made any gifts of UK assets, the PRs of her estate are able to file an IHT207.

Example three

Cara was born in the UK, but she’d lived nearly all her life and was non-UK LTR/domiciled in China. Her estate consists of several Chinese bank accounts with a total balance of £120,000 and a UK bank account with a balance of £20,000. Cara’s UK estate qualifies as an excepted estate. However, because she was born in the UK, her PRs can’t use the form IHT207 and they will need to report to HMRC using form IHT400.

Example four

Daniel was born in Denmark, where he’d lived and had been domiciled for all his life, so he was a non-UK LTR. His estate consists of several properties, quoted investments and cash in Denmark and elsewhere in the world, with a total value of £3 million. He’d given all his UK properties to his children three years earlier, but he still held £25,000 in a UK bank when he died. The estate qualifies as an excepted estate, but because he made gifts of UK assets within seven years of his death, the PRs can’t use the form IHT207 they’ll need to report to HMRC using IHT400. The PRs may also have IHT to pay if Daniel had used all the available allowances during his lifetime.

Speak to an expert

The estate you are dealing with may be more complex than the above examples, and there may be other factors to consider. We recommend seeking advice if you are administering an estate for a non-UK LTR/non-dom with UK assets. For professional advice tailored to your unique circumstances, please fill out the form below and one of our experts will be in touch to discuss your requirements and how we can help.