UK Inheritance Tax for Indian NRIs: Domicile, Deemed Domicile, and the 2025 Rule Change

An NRI software architect based in London for 14 years dies with a modest London flat, an ISA portfolio, and Rs 2,50,00,000 of Indian property. His family expects to inherit. What they do not expect is a bill from HMRC for nearly £300,000, triggered by a rule most NRIs in the UK have never heard of. The rule is called deemed domicile, and since April 2025 a residency-based replacement has made it bite earlier.

UK Inheritance Tax (IHT) is widely misunderstood by Indian NRIs. The common assumption is that an NRI who is not a British citizen and who plans to retire to India cannot be caught by a British death tax. That assumption is wrong, and the cost of getting it wrong falls on the family left behind.

The 30-second answer: UK Inheritance Tax is charged at 40% on the estate value above the £325,000 nil-rate band (frozen until 2028). For UK-domiciled individuals, the charge covers worldwide assets. For non-domiciled individuals, only UK-situs assets are in scope. The critical trap for Indian NRIs is the deemed domicile rule: under the old rules, 15 years of UK residence in the prior 20 tax years brought worldwide assets into scope (with a 3-year tail on departure). The Finance Act 2025 replaced this from April 2025 with a residency-based long-term resident (LTR) test: worldwide exposure applies after 10 years of UK residence, with a 10-year tail after leaving. India has no inheritance tax, and there is no UK-India IHT treaty, so Indian assets in scope face UK IHT with no offset. For a married couple, combined allowances can reach £1,000,000 (two nil-rate bands plus two residence nil-rate bands of £175,000 each). Planning is available, but it requires knowing your domicile and residency position precisely.

This guide covers the IHT basics, the domicile concept most NRIs misread, the deemed domicile and long-term resident rules in both their pre- and post-2025 forms, which UK and Indian assets are in or out of scope, how the allowances stack up, lifetime gifting options, and the specific planning steps NRIs in the UK should take. Two worked examples run the numbers for realistic NRI situations.

IHT basics: what it is and who it catches

UK Inheritance Tax is a charge on the estate of a deceased person. The estate covers all property, money, and possessions, including jointly held assets, some gifts made in the seven years before death, and assets held in certain trusts.

The basic structure is straightforward:

• Rate: 40% on the taxable estate.
• Nil-rate band (NRB): £325,000 (unchanged since 2009, frozen until at least 2028). No IHT on the first £325,000.
• Residence nil-rate band (RNRB): £175,000 additional allowance when a main UK residence passes to direct descendants (children, grandchildren). Not available for non-domiciled individuals on non-UK assets.
• The charge is administered by HMRC. The estate's executor (or administrator if there is no will) has responsibility for filing the IHT return and paying the tax, which is generally due six months after the end of the month of death.

Who does it catch? Here is where most NRIs in the UK go wrong. The scope of UK IHT is determined by domicile, not by residency, and not by citizenship. A person can be:

• UK-domiciled: worldwide estate is subject to IHT above the NRB.
• Non-UK-domiciled: only UK-situs assets (assets legally located in the UK) are subject to IHT above the NRB.

Under the old rules that governed all deaths before April 2025, "deemed domicile" extended UK-domiciled treatment to long-stay non-doms after 15 years of UK residence. Under the new rules in the Finance Act 2025, the trigger has changed to 10 years of UK residence, rebranded as the long-term resident test. Both systems are discussed below.

Domicile: the concept NRIs must understand

Domicile under English common law is not the same as tax residency, and it is not the same as citizenship. It is a legal concept that describes the country a person considers their permanent home.

There are three types relevant to NRIs.

Domicile of origin is the domicile you acquire at birth. For an Indian national born in India, the domicile of origin is India. This is the default and it persists unless positively replaced by something else. Moving abroad for work does not, by itself, displace an India domicile of origin.

Domicile of choice is acquired by moving to a country with the genuine, settled intention to reside there permanently or indefinitely. The bar is high. Living in the UK on a Tier 2 or Skilled Worker visa for five, eight, or even twelve years, with an intention to return to India at some stage, generally does not constitute a domicile of choice in the UK. The courts look at all the evidence: where you maintain a home, where your family is, whether you have a will that assumes UK or India law, your ties to India, and what you have actually said and done about your long-term intentions.

However, NRIs who obtain Indefinite Leave to Remain (ILR), bring their family to the UK, sell their Indian property, and make no effort to maintain Indian connections can gradually drift toward a UK domicile of choice. This is a facts-and-circumstances test and it can crystallise without any formal act on your part. If you are in this position, getting a formal domicile review from a UK private client solicitor is worth the cost.

Most Indian NRIs on work visas who retain genuine Indian ties are not UK-domiciled. They have an India domicile of origin and have not acquired a UK domicile of choice. For them, UK IHT applies only to UK-situs assets, unless they have been UK-resident long enough to trigger deemed domicile (old rules) or long-term resident status (new rules).

Deemed domicile: the 15-year trap under pre-2025 rules

Even without acquiring a domicile of choice, a non-UK-domiciled person could be treated as UK-domiciled for IHT purposes if they had been UK-resident for a long enough period. This was the deemed domicile rule.

Under the rules in place until 5 April 2025, a person was deemed domiciled in the UK for IHT purposes if they had been resident in the UK for at least 15 of the preceding 20 tax years. From the first day of deemed domicile, the entire worldwide estate became subject to UK IHT.

An NRI who moved to the UK in April 2006 and became deemed domiciled in April 2021 (their 15th year of UK residence within the rolling 20-year window) had worldwide IHT exposure from that date. After leaving the UK, the old rules provided a 3-year tail period: deemed domicile status continued for 3 further years of non-UK residence. So the same NRI, departing in April 2021, remained exposed on worldwide assets until April 2024.

For deaths and gifts that occurred before 6 April 2025, these are the rules that apply. Estates currently being administered where the deceased died before that date must be assessed under the 15-year/3-year framework, not the new one.

Long-term resident status: the new rules from April 2025

The Finance Act 2025 brought a fundamental change, effective from 6 April 2025. The UK moved from a domicile-based system to a residence-based system for determining IHT liability on non-UK assets.

Under the new framework:

• A person becomes a long-term resident (LTR) for IHT purposes if they have been UK-resident for 10 or more years in the preceding 20-year period.
• From the first tax year in which that 10-year threshold is crossed, their worldwide assets are subject to UK IHT.
• On leaving the UK permanently, a 10-year tail applies. During the 10 years following UK departure, worldwide assets remain exposed. After 10 full tax years of non-UK residence, the LTR status lapses.

The threshold has dropped from 15 years to 10 years, and the tail has extended from 3 years to 10 years. Both changes are unfavourable for long-stay NRIs.

An NRI who arrived in the UK in April 2016 becomes a long-term resident in April 2026 (10 years of residence). If she is still in the UK, all her worldwide assets (Indian property, NRE deposits, Indian mutual funds) are now within the IHT net. If she leaves the UK in, say, April 2027, the tail period runs until April 2037. During those ten years after leaving, she remains exposed on worldwide assets even as a non-UK resident.

The practical consequences are stark. An NRI who has spent a decade or more in the UK cannot simply relocate to India and assume the IHT exposure disappears quickly. Under the old rules, a 3-year tail was manageable. A 10-year tail is a different planning horizon entirely.

The new rules also affect excluded property trusts. Under prior law, a non-domiciled individual could settle non-UK assets into a non-UK trust and shelter them permanently from UK IHT. Under the Finance Act 2025, excluded property trusts settled by non-doms are now subject to IHT once the settlor becomes a long-term resident. The old shelter that many NRI and non-dom planning structures relied on has been significantly curtailed.

For non-UK-domiciled individuals who have been UK-resident for fewer than 10 years, the new rules represent no change in practical effect. Their UK IHT exposure remains limited to UK-situs assets only.

UK-situs assets: what is in scope regardless of domicile

For non-domiciled individuals who have not triggered LTR status, UK IHT applies to assets that are legally situated in the UK. The following are UK-situs:

• UK real estate (residential and commercial property). From April 2017, HMRC extended this to include UK residential property held through offshore companies or other structures, targeting the "envelope" arrangements that had been used to avoid IHT on London property. If you hold a UK property through a British Virgin Islands or similar offshore vehicle, the property is still UK-situs for IHT.
• UK bank and building society accounts, including current accounts, savings accounts, and fixed deposits at UK institutions.
• UK-listed shares and ISA holdings. An ISA wrapper does not protect assets from IHT. ISAs are free of income tax and capital gains tax but are fully subject to IHT in the estate of the deceased (though there are emerging AIM ISA strategies that use Business Property Relief, noted below).
• UK-registered life insurance policies (unless written in trust, discussed below).
• Debts owed by UK-resident persons or entities to the deceased.
• UK private company shares and UK business assets.

The following are not UK-situs assets and are therefore outside scope for a genuinely non-domiciled, non-LTR NRI:

• Indian real estate (houses, flats, agricultural land in India).
• NRE and NRO account balances held with Indian banks, including accounts at Indian branches of foreign banks.
• Indian mutual funds, shares, and equity portfolios (demat accounts, direct equity, NSE/BSE-listed holdings).
• Indian fixed deposits, PPF, and EPF balances.
• Foreign (non-UK) pensions, subject to the caveat that UK SIPPs and workplace pensions involve specific advice needs (discussed below).

The nil-rate band, residence nil-rate band, and transferred allowances

Understanding the stacking of allowances is essential to knowing the actual IHT exposure on any estate.

Basic nil-rate band: £325,000. Every individual has this, regardless of domicile. It is fixed at this level until at least April 2028.

Residence nil-rate band: £175,000. This is available when a main UK residential property (or a financial asset representing the proceeds if the property was sold) passes to direct lineal descendants (children, stepchildren, adopted children, or grandchildren). It is only available to UK-domiciled individuals, those with deemed domicile, or LTRs. A non-domiciled individual with only UK-situs assets being assessed on those alone does not generally benefit from the RNRB on non-UK assets, though they can use it on a qualifying UK property passing to children. The RNRB begins to taper for estates above £2,000,000, reducing by £1 for every £2 of excess, and disappears entirely for estates above £2,350,000.

Transferred nil-rate band. If a spouse or civil partner died without having used their full NRB, the unused percentage transfers to the surviving spouse's estate. A couple where the first spouse used none of their NRB (common if everything passed to the surviving spouse, which is entirely exempt) can effectively double the NRB on the second death to £650,000. With two RNRBs as well, a couple can shelter up to £1,000,000 from IHT (£325,000 + £325,000 + £175,000 + £175,000).

Transfers between spouses or civil partners are fully exempt from IHT for UK-domiciled couples. Where one spouse is non-UK-domiciled and the other is UK-domiciled, the spousal exemption is capped at £325,000 cumulative for transfers to the non-domiciled spouse, though the non-dom can elect to be treated as UK-domiciled for this purpose, trading a larger exemption now for worldwide IHT exposure later.

Lifetime gifting: how to reduce an estate now

One of the most underused strategies by NRIs is systematic use of the annual gifting allowances available during the donor's lifetime. Every pound removed from the estate before death is potentially a 40 pence saving.

Annual exemption: £3,000 per year. Gifts of up to £3,000 in a tax year are immediately outside the estate. If the allowance was not used in the previous year, the unused amount can be carried forward for one year only, giving a maximum of £6,000 in a single year. Over a 20-year career in the UK, consistent gifting removes £60,000 from the estate tax-free.

Small gifts exemption: £250 per person per year. Any number of individuals can receive up to £250 each per year. This is separate from the £3,000 annual exemption and cannot be used on the same recipient in the same year.

Wedding and civil partnership gifts. Tax-free at £5,000 to a child, £2,500 to a grandchild, and £1,000 to any other person.

Normal expenditure out of income. Gifts made regularly out of surplus income (not capital) and shown to be part of the donor's normal expenditure are fully exempt with no annual limit. A UK-based NRI who regularly sends money to parents in India from surplus income may qualify, though HMRC requires clear evidence of pattern and surplus income.

Potentially Exempt Transfers (PETs). Any gift to an individual (not to a trust) is a PET. If the donor survives 7 years, the gift is fully exempt and does not count toward the estate. If the donor dies within 7 years, the gift is brought back into the estate for IHT calculation, subject to taper relief:

• 0 to 3 years before death: full IHT applies.
• 3 to 4 years: 80% of the IHT rate (effective 32%).
• 4 to 5 years: 60% of the IHT rate (effective 24%).
• 5 to 6 years: 40% of the IHT rate (effective 16%).
• 6 to 7 years: 20% of the IHT rate (effective 8%).
• 7 or more years: exempt entirely.

Business Property Relief (BPR) at 100%. Qualifying business assets are entirely relieved from IHT. This includes shares in unquoted (private) trading companies, interests in a business partnership, and shares listed on AIM (the Alternative Investment Market). AIM shares held in an ISA can therefore achieve both income tax efficiency and IHT exemption through BPR, making AIM ISAs a popular planning vehicle for UK-based NRIs with substantial ISA portfolios. The 100% BPR rate for AIM shares was reduced to 50% for deaths from April 2026 under the Autumn Budget 2024 announcements, so this vehicle is less powerful than it was previously.

Agricultural Property Relief (APR). For UK agricultural land and buildings used for farming, 100% relief is available in most cases.

The India-UK IHT gap: no estate tax treaty

There is no bilateral estate or inheritance tax treaty between India and the United Kingdom. India abolished its Estate Duty in 1985 and has not replaced it with an inheritance tax. Beneficiaries in India who inherit from an NRI's estate pay no Indian inheritance tax.

The consequence for an NRI who is UK-domiciled or an LTR is that Indian assets in scope face UK IHT at 40% above the NRB, with no credit for any Indian tax (because no Indian tax applies). The estate pays UK IHT on the Indian property, and Indian heirs receive the balance. There is no mechanism for offset, and no double-taxation agreement covers this gap.

This contrasts with the position of a UK-US NRI. The US-UK Estate and Gift Tax Treaty provides some limited credits and exemptions in cross-border estates. Indian NRIs have no equivalent protection, which makes the domicile and LTR analysis, and proactive lifetime planning, particularly important.

If you are a UK-LTR NRI with significant Indian assets (property, equity portfolio, NRE deposits), the liability on those assets in the event of your death falls entirely on your estate. Your executors will need to obtain valuations of Indian property, convert them to sterling, and report them to HMRC, before paying IHT from whatever UK liquidity is available or from the sale of UK assets. Indian assets themselves cannot normally be used directly to pay UK HMRC, so there is a liquidity risk: the estate may need to sell the London flat to pay the IHT bill on the Mumbai property.

Trusts and IHT: the brief picture

UK discretionary trusts do not avoid IHT. Assets settled into a UK discretionary trust by a UK-domiciled individual are subject to:

• An entry charge of up to 20% (half the full rate) on any transfer above the NRB at the time.
• A periodic (10-year anniversary) charge at up to 6% of the trust's value above the NRB.
• An exit charge each time assets leave the trust, at a fraction of the 6% based on the number of full quarters since the last periodic charge.

These charges are lower than the 40% death rate, and trusts have legitimate uses for asset protection and succession planning, but the IHT liability does not disappear.

For non-domiciled NRIs, the picture changed in April 2025. Before the Finance Act 2025, settling non-UK assets into a properly structured non-UK (excluded property) trust could permanently shelter those assets from UK IHT, regardless of how long the settlor later remained UK-resident. That shelter has been curtailed. Under the new rules, assets in an excluded property trust become subject to UK IHT (periodic and exit charges) once the settlor becomes a long-term resident. Trusts settled before April 2025 by non-doms are affected by transitional provisions; professional advice specific to your trust's situation is essential.

Practical IHT planning steps for NRIs in the UK

The planning moves that matter most depend on where you are in your UK journey.

Step 1: Know your position. Are you UK-domiciled, or non-domiciled? If non-domiciled, how many tax years of UK residence have you completed? Under the post-April 2025 rules, the 10-year LTR threshold is the critical marker. If you have been UK-resident for fewer than 10 years and are non-domiciled, your IHT exposure is limited to UK-situs assets. If you have crossed 10 years, or will soon, you face worldwide exposure.

Step 2: Keep records of residency years. The count for LTR purposes uses the UK statutory residence test, not simply calendar years. Split-year treatment, the statutory residence test (SRT) ties and factors, and years of non-UK residence all feed into the count. Keep a clear record and take professional advice at the 9-year mark.

Step 3: Use annual gifting allowances every year without fail. The £3,000 annual exemption sounds small but is real and cumulative. For NRIs who remit regularly to India, some of those remittances may qualify as normal expenditure from income, giving an unlimited exemption if structured correctly.

Step 4: Consider reducing UK-situs assets before crossing the LTR threshold. Selling a UK investment property before becoming an LTR removes a UK-situs asset from scope. The sale will likely trigger UK capital gains tax (CGT), so compare the CGT bill against the potential IHT savings on the long tail. For a high-value property, the IHT saving over a 10-year tail period typically outweighs the CGT cost on a reasonable assumed gain. This is a calculation worth doing with a UK tax adviser.

Step 5: Write life insurance in trust. A UK whole-of-life policy or term policy that is written in trust (held by the trust from the outset, not merely assigned to it later) pays out to the trust beneficiaries directly without forming part of the deceased's estate. The payout bypasses probate and IHT. For an NRI with a large UK estate but limited liquid assets, a life insurance policy in trust sized to cover the anticipated IHT bill is one of the most cost-effective planning tools available.

Step 6: Make a UK will (and consider an India will as well). Without a valid will, the UK intestacy rules govern the distribution of UK assets. The intestacy rules may not produce the outcome you want, and they do not automatically minimise IHT. A properly drafted UK will, reviewed by a solicitor who understands your NRI circumstances, can ensure the NRB and RNRB are used correctly, charitable gifts (which qualify for an IHT rate reduction to 36% if 10% or more of the estate goes to charity) are structured, and the estate administration is efficient. A separate Indian will, or a will valid in both jurisdictions, is advisable if you hold significant Indian assets.

Step 7: Plan the 10-year tail if you leave. Under the post-April 2025 rules, an NRI who leaves the UK after becoming an LTR retains worldwide IHT exposure for a full 10 years. During this period, continuing to use the annual gifting exemptions, making PETs (with the 7-year survival clock running), and gradually repositioning assets to a non-UK situs structure can reduce the taxable estate. PETs made in years 8, 9, or 10 of the tail are progressively more likely to become fully exempt if the donor survives. The key is to start the clock as early as possible.

Worked example: Rohan's estate under post-2025 rules

Rohan, 52, is a product manager at a London technology firm. He arrived in the UK in April 2002 and has been UK-resident continuously since. As of April 2026, he has been UK-resident for 24 full tax years. He is Indian-born with an India domicile of origin, and he has not acquired a UK domicile of choice. Under the post-April 2025 long-term resident test, he crossed the 10-year threshold in April 2012 and has been a long-term resident ever since. His entire worldwide estate is in scope for UK IHT.

His estate:

Asset	Value
London flat (net of £200,000 mortgage)	£750,000
UK ISA portfolio	£180,000
UK SIPP pension	£220,000
India property	Rs 2,50,00,000 (approx £250,000)
India equity portfolio	Rs 1,00,00,000 (approx £100,000)
NRE/NRO deposits	Rs 50,00,000 (approx £50,000)
Total worldwide estate	£1,550,000

Note: UK SIPPs are normally outside the IHT-free zone for pension purposes. From April 2027, the government intends to include unused pension funds in the taxable estate; this example includes the SIPP on that basis.

Rohan is unmarried. He has no transferred NRB from a predeceased spouse. The London flat passes to his daughter, qualifying for the RNRB.

• Basic NRB: £325,000
• RNRB (flat to daughter): £175,000
• Total exempt: £500,000
• Taxable estate: £1,550,000 minus £500,000 = £1,050,000
• IHT at 40%: £420,000

His family inherits a combined estate worth £1,550,000 but owes HMRC £420,000 in cash, typically within 6 months of the date of death. The UK flat and ISAs must likely be liquidated to pay the bill.

If Rohan had left the UK in April 2026 and waited 10 years before dying: Under the 10-year tail rule, only UK-situs assets remain exposed in the 11th year after departure. Assuming he has by then transferred the Indian assets back to India and has retained only the flat and ISA:

• UK situs: £750,000 (flat) + £180,000 (ISA) = £930,000
• Basic NRB: £325,000
• RNRB: £175,000
• Total exempt: £500,000
• Taxable estate: £930,000 minus £500,000 = £430,000
• IHT at 40%: £172,000

The difference between dying as a UK long-term resident versus dying after a full 10-year departure tail is £248,000 in this scenario, on an estate of the same underlying value.

If Rohan were married with a spouse who dies first, leaving everything to Rohan: the estate on Rohan's subsequent death could use both NRBs (£650,000) and both RNRBs (£350,000), sheltering £1,000,000 from IHT. On a £1,550,000 estate, taxable would be £550,000 and IHT would be £220,000. The married couple's combined allowances are therefore worth an extra £200,000 in IHT savings compared to the single-person scenario.

Edge cases

Non-domiciled spouse election. A non-domiciled individual married to a UK-domiciled spouse can elect to be treated as UK-domiciled for IHT purposes. This removes the cap on the spousal exemption (enabling unlimited transfers between spouses), at the cost of bringing worldwide assets into the IHT net. The election is irrevocable and should be made only with a clear estate plan in place.

UK pensions. A UK SIPP or workplace defined contribution pension is currently outside the taxable estate for IHT purposes if the pension fund is undrawn (held by the trustees, with the individual having a nomination of beneficiary but no legal entitlement). The government announced in the Autumn Budget 2024 that unused pension funds will be brought into the IHT net from April 2027. The final rules under the Finance Act 2025 confirmed this change. NRIs with large SIPPs should model IHT exposure on the pension pot now, not after the fact.

AIM shares. AIM-listed shares held for at least 2 years qualify for Business Property Relief at 100% (reduced to 50% for deaths from April 2026). For an NRI with a significant UK portfolio, holding some AIM exposure through an AIM ISA achieves both income tax efficiency and partial IHT mitigation. The reduction to 50% BPR from April 2026 reduces but does not eliminate the benefit.

The 14-year rule for PETs. When calculating IHT on death, HMRC looks at all chargeable transfers in the 7 years before death. This can include earlier PETs that brought previous gifts back into the picture. If a donor made a large gift more than 7 years ago, it is completely exempt. But a sequence of gifts over many years interacts with the NRB in a specific order, and professional advice is needed where there is a complex gifting history.

India property valuation. For an LTR NRI who dies with India property, HMRC requires a market value for the property at the date of death. Obtaining a credible independent valuation of Indian real estate for UK IHT purposes is not straightforward. NRIs in this situation need both a UK-qualified IHT practitioner and an India-side professional who can produce a valuation that HMRC will accept.

UK residential property held through a company. Since April 2017, UK residential property held through an offshore or UK company is treated as UK-situs for IHT regardless of where the company is incorporated. An NRI who owns a London flat through a BVI company cannot shelter it from IHT on that basis.

Charitable gifts. If 10% or more of the net estate (after reliefs and exemptions) is left to UK charities, the IHT rate on the rest of the estate reduces from 40% to 36%. For an estate where significant UK charitable giving was planned anyway, structuring the will to meet the 10% threshold can save meaningful sums.

The closing read

UK Inheritance Tax catches more Indian NRIs than any other UK tax. The reason is structural: most NRIs are tax-compliant on income during their working years, understand that they pay PAYE or self-assessment, and know broadly what capital gains tax involves. IHT sits in the background, triggered only on death or on large lifetime gifts, and it operates on the basis of domicile and now residency rather than current-year facts. An NRI can have left the UK, stopped paying UK income tax, and closed a UK bank account, and still face a large UK IHT bill if they die within 10 years of departure.

The Finance Act 2025 changes the framework in two critical ways: the trigger for worldwide exposure drops from 15 years of residence to 10, and the tail after leaving extends from 3 years to 10. If you are an Indian NRI who has been in the UK for a decade or more, you are likely already a long-term resident under the new rules. If you are approaching 10 years, the planning window is now.

The honest read: for an NRI with a combined UK and India estate above £500,000, the combination of the nil-rate band freeze, the extended LTR tail, the absence of an India-UK IHT treaty, and the new pension IHT changes make a formal IHT review with a UK private client solicitor not optional but necessary. The cost of the review is small compared to the tax that an unadvised estate can face.

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Related guides:

• UK QROPS Pension Transfer for NRIs
• UK NRI Annual Tax and Compliance Calendar
• NRI Succession Certificate: What It Is and When You Need One
• NRI Financial Transition on Return to India
• US Situs Estate Tax Planning for Indian NRIs
• NRE Account Interest: When It Becomes Taxable
• RNOR Tax Planning for Returning NRIs
• NRI EPF and PF Strategy: What to Do with Your Provident Fund
• NRI HUF Tax Planning
• NRI Inheritance and Estate Tax in India
• Selling Inherited Property as an NRI: Capital Gains Tax Guide

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Disclaimers: UK Inheritance Tax rules changed significantly in April 2025 under the Finance Act 2025. The long-term resident test, the 10-year tail on departure, and the excluded property trust changes are new provisions; verify current rules with up-to-date HMRC guidance and Finance Act 2025 secondary legislation. Domicile determinations under English common law are complex, fact-specific, and can be contested by HMRC. Deemed domicile determinations (for pre-April 2025 deaths and gifts) follow different rules from the new LTR test. UK pension IHT changes announced for April 2027 are subject to final secondary legislation. There is no India-UK inheritance or estate tax treaty. This article is for general information only and does not constitute legal, tax, or financial advice. Obtain advice from a UK-qualified private client solicitor or IHT adviser and an Indian chartered accountant for any estate planning decisions. The NRI financial planning position involves both UK and India rules simultaneously; professional advice in both jurisdictions is recommended.