US-UK Estate & Gift Tax Treaty - Practical Planning for Cross-Border Families

Introduction

The changes to inheritance tax (‘IHT’) from 6 April 2025 have significantly changed the estate planning landscape for families with connections to both the UK and the US. The move from a domicile-based system to a long-term UK residence test for exposure to IHT on overseas assets has important implications for Americans relocating to the UK, British clients with US assets and families with cross-border interests. In particular, trusts established before moving to the UK may no longer provide the protection previously expected. However, domicile remains relevant under the US-UK Estate and Gift Tax Treaty, which can offer valuable reliefs and planning opportunities when its provisions are properly understood and applied.

This virtual classroom seminar will explore the practical operation of the Treaty alongside the post-April 2025 UK rules. Using worked examples, it will examine opportunities to establish IHT-protected trusts, the position of British beneficiaries inheriting US investments and the interaction between the UK spouse exemption and US marital relief. It will consider how nationality, domicile, residence and the timing of transfers affect the availability of relief and why familiar estate planning strategies may produce unexpected outcomes where US and UK rules overlap. Attendees will gain a practical understanding of how to identify and apply treaty protection, recognise its limitations and coordinate UK estate planning with US advice and reporting requirements.

The session will be particularly relevant to professional advisers involved in tax and estate planning for UK-resident Americans, British nationals living in the US, clients with cross-border assets or business interests and families with wider US and UK connections.

What You Will Learn

This live and interactive session will cover the following:

• The post-6 April 2025 IHT framework - how the long-term UK residence rules affect overseas assets, lifetime transfers and trusts, including continuing IHT exposure following departure from the UK
• The continuing relevance of domicile - the distinction between the UK domestic-law residence test and treaty domicile, including the significance of nationality and the Treaty's tie-breaker provisions
• Treaty relief and the allocation of taxing rights - how the Treaty determines taxing rights and when it can restrict exposure to UK IHT or US estate and gift tax
• Non-US citizens holding US assets - the importance of treaty protection in mitigating the limited US estate tax exemption available to non-US citizens
• Estate planning for US/UK couples - how differing Treaty status between spouses affects planning, and the interaction between the UK spouse exemption and US marital relief
• Establishing treaty-protected trusts - the requirements for protection under Article 5(4), why the settlor's status at the date of settlement matters and the distinction between establishing a trust and subsequently adding funds
• Practical advice and implementation - the information advisers need to obtain, key planning opportunities and deadlines to identify and when specialist US tax and estate planning advice is essential

Recording of live sessions: Soon after the Learn Live session has taken place you will be able to go back and access the recording - should you wish to revisit the material discussed.