Why British expats in Portugal are revisiting inheritance tax and succession strategies

However, a major reform introduced in April 2025 has led many British expats to take another look at how their wealth and succession plans are structured.

The UK has replaced its long-standing domicile-based inheritance tax framework with a new system that places greater weight on long-term UK residence.

Although the reform may appear technical on the surface, it could have meaningful consequences for internationally mobile individuals and families, particularly those with assets spread across multiple countries.

A new approach to inheritance tax

Historically, domicile was a key factor in determining whether UK inheritance tax applied to an individual’s estate.

Under the revised framework, residency patterns and ongoing ties to the UK are now more central to how HMRC evaluates potential inheritance tax exposure.

As a result, assets that were previously thought to fall outside the scope of UK inheritance tax may now need to be reconsidered. These could include pensions, property located in the UK, investment portfolios and certain internationally held assets that maintain a connection to the country.

Renewed attention on succession planning

Because many wealth structures were created under the previous rules, the recent changes are prompting some families to review whether their arrangements still operate in the way they originally intended.

Paul Stannard, Chairman and Founder of Portugal Pathways, said: “We’re seeing more families increasingly reviewing how the residency-based system may affect long-term inheritance tax exposure and which assets could potentially fall within the UK tax scope.

“Questions are also being raised about whether existing pension arrangements and estate structures continue to function as originally intended.

“Because of this, early and informed review with experienced cross-border advisers has become increasingly important.”

Structured solutions gaining attention again

As the regulatory landscape evolves, many UK nationals living overseas are revisiting planning structures commonly used to organise wealth and manage inheritance tax exposure across jurisdictions.

Matt Firman, CEO at St. James Global, who specialises in cross-border wealth planning for internationally mobile UK families, said: “Structures such as Self-Invested Personal Pensions (SIPPs), Qualifying Non-UK Pension Schemes (QNUPS) and offshore trusts have come back into focus as families explore how they may fit within the new framework.

“These types of arrangements may help in managing exposure, maintaining control over succession planning, and organising internationally held assets more efficiently.

“For families with UK-linked assets or beneficiaries, careful structuring may also help reduce complexity when managing wealth across different jurisdictions. However, the suitability of any approach depends on an individual’s circumstances, which is why many expats are seeking specialist guidance.”

Learning more about the changes

Managing estate planning across borders often involves balancing multiple tax regimes and legal systems. For British nationals living in Portugal, understanding how the UK’s updated inheritance tax approach may affect their situation can be an important first step.

Those seeking further clarity may wish to attend an upcoming online expert briefing organised by Portugal Pathways together with Matt Firman from St James Global. The session has been created specifically for UK nationals based in Portugal.

During the live event, speakers will examine how succession planning strategies are evolving under the new residency-based system, how internationally held assets may now be evaluated, and the key questions families should consider when reviewing their arrangements.

The briefing will take place on Wednesday, 18th March 2026, at 10:00 AM (Lisbon Time) and will feature cross-border planning specialists who have helped many UK families living in Portugal navigate estate and wealth planning.

Participants will also be able to ask questions directly during the session and gain practical insights relevant to their own circumstances.

To register for Portugal Pathways’ upcoming webinar, click here.