UK tax rules can be confusing, especially if you are inheriting money from overseas. With constantly changing rules and multiple jurisdictions to navigate, it can all feel very overwhelming, especially at a time when you’re already dealing with loss. 

At Provira, we work with families all over the UK who need help navigating this confusing time. 

So, whether you’re inheriting money, property, or investments from overseas, here’s what you need to know about how the UK taxes foreign assets, and how Provira can help if a UK tax bill is due before international funds are released.

Do you pay UK Inheritance Tax on money or property from abroad?

Sometimes. The UK can charge tax on overseas inheritance, but it depends on where the person who has passed away was considered to be based, either by domicile (before April 2025) or by long-term residence (after April 2025).

Until April 2025: the domicile system

The key question before April 2025 was: was the person who died UK-domiciled?

• If yes: their worldwide assets could be subject to UK Inheritance Tax (IHT).
• If no: only their UK assets were taxable.

From April 2025: the new long-term residence system

The UK is now moving to what they call a residence-based system.

Instead of a person’s legal domicile, the more important element is how long a person has lived in the UK. Under the new guidelines, a person is considered a long-term UK resident if they have been tax-resident for:

• 10 consecutive years, or
• 10 out of the previous 20 years

If the person who has passed away meets either of these, then their worldwide estate, including any overseas money, property or investments, may be subject to UK IHT.

Double taxation on Inheritance from overseas

One of the more complicated elements of overseas inheritance is the fact that the UK has Inheritance Tax treaties with several countries.

These agreements are designed to make sure beneficiaries aren’t being taxed twice on the same asset. If you pay Inheritance Tax on the assets in one of the below countries, you may be exempt from paying all of it in the UK, even if the deceased falls under the long-term residence system.

Some countries that have this kind of agreement with the UK include the USA, Ireland, Switzerland, Sweden, the Netherlands and South Africa. 

If there is no treaty, that doesn’t necessarily mean you will be taxed twice. HMRC might provide Unilateral Relief, which means you can claim back some of the foreign tax you’ve already paid against the UK bill.

Do you need to tell HMRC about an overseas inheritance?

Not always. You only need to let HMRC know if:

• UK IHT is due
• The inheritance generates income (e.g. rent, interest, dividends)
• You sell foreign assets and make a gain
• HMRC gets in touch about a large transfer coming into the UK

If IHT does apply, the executor has to complete the IHT400 form to declare the details of the estate. 

How UK Inheritance Tax works if you do have to pay it

Before going any further, it’s probably worth quickly recapping how UK Inheritance Tax works if you do need to pay it.

Here it is in a nutshell:

• Every property, investment and item of value is counted as a deceased person’s “estate”.
• You pay no tax on the first £325,000 of the estate that you inherit. (the nil-rate band)
• You get an additional £175,000 tax-free allowance if you leave your home to your children or grandchildren
• Couples can combine their allowances if they are married or civil partners, totalling a potential £1 million tax-free.
• The estate then pays 40% IHT on anything above these allowances, and this must be paid within 6 months of a person’s death.

Importantly, IHT is paid by the estate, not by individual beneficiaries.

But when money is stuck in a bank account or property overseas, UK IHT deadlines create real problems. 

If the estate includes overseas assets that are tied up, delayed, or still going through foreign probate, executors may have no way to pay UK tax on time.

This is where many families turn to Provira’s Estate Advance.

How Provira helps when UK Inheritance Tax is due before foreign assets are released

This is one of the most common issues we see.

Because overseas assets can take months – sometimes years – to release or sell, many executors simply do not have the money to pay HMRC on time.

But not paying on time can mean penalties, daily interest charges and legal backlash for executors. 

At Provira, we believe that no family should be forced to sell their inherited assets quickly, borrow against their home, or face penalties simply because money is locked overseas.

This is where Provira’s Estate Advance provides a lifeline.

Provira Estate Advance 

At Provira, we offer executors funding of up to 50% of the estate value, including when:

• Overseas funds are tied up
• A foreign property is still being sold
• Banks or courts abroad are slow to release money
• Executors cannot personally cover the IHT bill
• Multiple jurisdictions are involved

The Estate Advance allows you to:

• Pay the UK IHT bill immediately
• Avoid interest and penalties
• Prevent stress for executors
• Avoid pressure to sell assets at the wrong time
• Keep the estate administration moving

Once the overseas funds are eventually released, the advance is paid back from the estate, not from your personal finances. 

To find out whether you might be eligible for an Estate Advance, get in touch with the team today.

Inheriting assets from overseas

Inheriting assets from another country can feel stressful, especially at a time when you are already emotionally drained. 

Different laws, different tax systems and slow processes can add stress to an already difficult time.

But you don’t have to go through it alone.

At Provira, we specialise in supporting families who are dealing with UK Inheritance Tax when assets are tied up abroad. Our Estate Advance gives fast financial support when you need it most, helping you pay tax bills, avoid penalties from HMRC and move forward with confidence.

If you’re dealing with an overseas inheritance and facing delays, speak to Provira today, our team is here to help.