HELPLINE: 
Cross-border inheritance and tax risks for long-term UK residents
The situation. Mr Smith* was born in France and lived in the UK for 30 years. Now planning to move back to France, he contacted us for advice on how UK and French tax rules will affect his finances and estate.
Overall process. Despite being French-born, Mr Smith is considered UK-domiciled under HMRC’s new rules. He meets the “deemed domicile” condition by meeting their “15-year rule”, being UK resident for 15 of the last 20 years. This means his worldwide assets may remain subject to UK Inheritance Tax (IHT) for up to six years after departure.
Once settled in France he will become a French tax resident triggering liability for income tax and capital gains tax, plus wealth tax (IFI) if French real estate exceeds €1.3 million. If he dies after six years in France, French inheritance tax applies to his global estate.
Risks. Mr Smith may face double taxation on income and assets. Although a UK-France tax treaty exists, relief is not always automatic. Cross-border estate planning is essential.
Strategies. He should review asset ownership, reduce UK exposure and use French tools like assurance vie and démembrement to manage inheritance.
Takeaway. With timely planning, Mr Smith can reduce his tax risks and protect family wealth when he returns to France.
*Names have been changed for confidentiality.