UK inheritance tax changes prompt interest in overseas relocation

Upcoming changes to UK inheritance tax (IHT) laws are expected to impact many families starting in April 2027. Most unused pension pots and death benefits will fall within the scope of IHT, potentially leading to a triple tax burden. This includes inheritance tax, income tax on pension funds if the deceased was 75 or older, and the potential loss of the residence nil-rate band allowance for larger estates.

As the £325,000 tax-free allowance remains frozen, some individuals are exploring relocation to countries with more favorable tax regimes for estate planning. Australia, for instance, abolished inheritance tax in 1979, though capital gains and income taxes may still apply to inherited assets. New Zealand also lacks an inheritance tax system, though specific rules regarding the sale of inherited property may trigger taxes. Singapore is also noted as a potential destination for those seeking to reduce estate tax liabilities.