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Emigrating is quite an extreme step to take just to avoid IHT.

However, it can be an option worth exploring if you have family, friends or other ties overseas, and moving would suit your lifestyle.

Those who are UK domiciled have to take very significant steps to escape the long reach of IHT.  Firstly, you need to live abroad for at least four tax years.  Secondly, you must acquire a new domicile of choice in another country, through an intention to live the rest of your life in that country.  Thirdly, you must sever any ties to the UK that HMRC might see as an indication that you intend to return to the UK in the future.

Sir Richard Burton, star of the stage and silver screen, died having lived the last 27 years of his life abroad.  He had not paid tax in the UK for many years, left no assets in the UK and was buried in Switzerland, where he had long been resident for tax purposes.   However, a Welsh flag on his coffin and an unused burial plot in Wales (purchased while still married to Elizabeth Taylor) were enough for HMRC to successfully argue that he was still UK domiciled, and to collect £2.4 million of tax from his worldwide estate.

It is of course also important to consider the tax regime in your domicile of choice, and to take local advice.  Some countries are well-known tax havens.  But many countries have tax regimes where the tax burden is similar, or higher.


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