What is estate planning?
Estate planning is about ensuring your assets are passed on in line with your wishes, both during your lifetime and after your death, in the most effective and tax-efficient way possible.
Managing Inheritance Tax (IHT) is a key part of this process. The earlier you put a plan in place, and the more considered it is, the greater the opportunity to reduce the impact of IHT on your wealth.
A well-structured estate plan helps you retain financial control, make confident decisions, and ensure you have the resources to live the life you want while protecting against the unexpected. It can also allow you to make gifts during your lifetime and enjoy seeing the difference they make to your family, loved ones or causes that matter to you.
Living in the Middle East, especially over the longer-term, can open up new opportunities in terms of building a structured plan that mitigates against IHT.
What is inheritance tax?
Inheritance Tax is a tax charged on the value of your estate when you die. It is usually paid by those who inherit your estate (other than a spouse or civil partner) and must typically be settled before assets can be distributed to beneficiaries.
Your estate includes all your worldwide assets, such as property, savings, investments, pensions (From April 2027) and other valuables.
IHT only applies when the value of an estate exceeds certain thresholds, and with proactive planning, the tax can often be reduced or even avoided altogether by making full use of available allowances, reliefs and exemptions. It’s important to note that tax rules depend on individual circumstances and can change over time.
Managing an inheritance tax liability
There are a number of strategies that can be used to reduce or manage an inheritance tax bill, including:
- Making lifetime gifts to family, loved ones or charities
- Structuring your estate to take full advantage of available IHT exemptions
- Using a life insurance policy, written in trust, to help cover any tax liability
- Investing in qualifying, tax-efficient assets that may benefit from business relief
Tax & Estate Planning FAQs
It depends on your UK tax residency status under the Statutory Residence Test (SRT). Many UK expats in the Middle East are non-UK tax resident, meaning foreign income and gains may not be taxable in the UK. However, UK-sourced income (such as rental property or pensions) may still be taxable.
The SRT determines whether you are UK tax resident in a given tax year. It considers:
- Days spent in the UK
- Ties to the UK (family, work, accommodation)
- Your residency history
Returning to the UK can trigger Capital gains tax on future disposals and UK income tax on worldwide income.
Advance planning before repatriation should be taken to ensure you are optimising your position and wealth is structured correctly.
In most cases, yes. UK expats often benefit from a UK Will covering UK assets and a local Will covering Middle East assets. This helps ensure assets are distributed correctly and efficiently across jurisdictions.
Your estate may be distributed according to UK intestacy rules (for UK assets) and Sharia law in the Middle East, which may not align with your wishes.
This can lead to delays, additional costs, and unintended outcomes for family members
You'll generally be free from UK IHT on non-UK assets once you've been non-resident for 10 full tax years.
Plans should be reviewed:
- Annually
- After any legislation changes
- When moving countries
- On marriage, divorce, or birth of children