Children Living Abroad — Inheritance Planning
A single English will and a beneficiary in New York can create tax problems on both sides of the Atlantic.
Cross-border inheritance is now the norm, not the exception. Most standard UK wills are drafted as if every beneficiary lives in Surrey.
The real problem
Increasingly, UK families have children living in the US, the EU, the UAE or Australia. Each of those jurisdictions has its own inheritance rules — some, like the US, have their own inheritance tax; some, like several EU countries, have forced heirship rules that can override an English will.
A well-meaning UK will can create three separate problems: double taxation where two jurisdictions both want to tax the same inheritance; reporting obligations in the beneficiary's country of residence that catch families entirely by surprise; and conflict between the UK will and any local will the family later signs abroad — often accidentally revoking one with the other.
What's changed
US IRS reporting for gifts and inheritances received by US persons has hardened. Non-compliance carries substantial penalties.
Several EU jurisdictions — France, Spain, Italy — apply forced heirship rules that reserve fixed shares of an estate for children, regardless of what the deceased's will says about UK assets.
The UAE now has its own inheritance framework post-2023, distinct from Sharia default rules, that non-Muslim expatriates need to opt into if they want their UK will respected locally.
What this looks like in practice
A UK couple in London, £3m estate, two adult children — one in Notting Hill, one in San Francisco. Under a standard will, the estate splits equally on second death.
What actually happens: the US-resident child receives roughly £1.5m. That inheritance itself doesn't trigger US federal estate tax (which is levied on the estate of the deceased, not the beneficiary). But the assets, once received, sit inside a US person's worldwide taxation for the rest of their life — including annual reporting on any foreign accounts inherited, potential PFIC issues on UK investment funds, and state-level inheritance tax in some states.
With planning: the UK will can be structured to hold the US-resident child's share in a trust that keeps assets outside their personal ownership for US tax purposes; UK life cover can be written into trust to equalise the after-tax positions; and — critically — the will can coordinate with any US or foreign local will so they don't revoke each other.
Where you live matters less than you'd think
HMRC applies the same rules whether the estate is in Devon or Durham. What varies from one region to the next is asset value and family shape, not the tax code.
We work nationally by video call. Documents are signed remotely or couriered when wet signatures are needed. Almost every client we've helped with this problem in the last twelve months has never set foot in our office — and none of them received worse advice for it.
The local estate planner you were referred to may or may not have handled this specific situation before. The right question is not "are they nearby?" but "have they done this ten times?"
What we'd actually do
- 1
Understand the estate
A short, structured conversation about what you own, where it sits, and who is meant to receive it. No jargon and no product pitch. This alone often reveals the problem.
- 2
Estimate the potential exposure
We estimate the potential exposure — including the changes coming in 2026 and 2027 — and identify which areas need legal drafting, regulated advice, or tax input. You see the shape of the problem, not an assumption.
- 3
Design the plan in the right order
We tell you which two or three decisions move the needle, and which are decoration. Most estates need three or four things done properly, not everything.
- 4
Put it in place and review
Documents drafted, structures set up, life cover written into trust where relevant, and a review schedule so the plan tracks your life instead of gathering dust.
Common questions
Do I need a separate will for each country where my beneficiaries live?
Sometimes. It depends where the assets are, not where the beneficiaries are. Assets in Spain typically need a Spanish will covering only those assets, coordinated with the English will so neither revokes the other. Assets in England for a beneficiary in the US usually only need one will — but the drafting matters.
Does the UK have inheritance tax treaties with other countries?
The UK has estate/inheritance tax treaties with the US, France, Netherlands, Ireland, South Africa, Sweden, Switzerland and India, among others. These prevent double IHT in most scenarios but the reliefs are technical and often require professional claims to secure them.
What about beneficiaries in the EU with forced heirship?
For UK-based assets, English succession law generally applies. Where the deceased is UK-domiciled with only UK assets, forced heirship in the beneficiary's country of residence usually doesn't override the UK will. Where the deceased has any assets in a forced-heirship country, it becomes considerably more complex.
Should we consider a trust for an overseas child?
Often yes, for tax and asset-protection reasons — but 'trust' means different things in different jurisdictions. A UK discretionary trust is well understood by HMRC and treated crudely by the IRS. Get advice on both sides before you sign anything.
Two ways forward — pick the right lane
Some of what this page covers is drafted and delivered by IMS. Some needs a regulated adviser. Use the CTA that matches what you're actually asking for.
Regulatory notice. Inheritance Made Simple is not authorised or regulated by the Financial Conduct Authority. Where clients require regulated investment or pension advice, introductions are made to independently FCA-regulated advisers.
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