RELOVA JOURNAL

Blog/Published April 18, 2026 · Updated September 19, 2026

How to Handle Inheritance and Wills as an Expat in 2026

By Anna Moore

Inheritance and wills abroad in 2026: UK IHT stays frozen at GBP 325k with 40% above it, and a 2027 change pulls pensions into taxable estates too.

Cross-border estate planning gets complicated fast because three separate legal systems can all claim a piece of it: the country where you live, the country where the asset sits, and the country that issued your passport. Nowhere is that collision clearer than for UK expats. The UK's inheritance tax nil-rate band remains £325,000, with a further £175,000 residence nil-rate band available in many cases when a main home passes to direct descendants, and 40% applies to the value above those combined thresholds. Both bands are frozen until April 2031 under measures confirmed in recent UK budgets — meaning they are not adjusting for inflation, so more estates get pulled into taxable territory every year purely through asset-value growth rather than any change in the underlying rules.

The 2027 pension change that resets the planning math

A genuinely consequential shift is coming for UK expats who have built retirement savings in pensions specifically because pensions have historically sat outside the inheritance tax estate: from 6 April 2027, unused pension funds and death benefits are being brought into the scope of UK inheritance tax under changes announced in the Autumn 2025 Budget. This matters enormously for anyone who structured their estate planning around the old assumption that pension pots pass to heirs IHT-free — that assumption stops holding from that date, and anyone with a meaningful pension balance and UK-domicile exposure should be reviewing their will and beneficiary nominations with a cross-border adviser well before the change takes effect, not after.

Portugal's lighter touch on direct-family transfers

Portugal takes a structurally different approach: rather than a standalone inheritance tax, transfers to a spouse, descendants, or ascendants (children, grandchildren, parents) are generally exempt from stamp duty on inheritance, while transfers to more distant relatives or unrelated beneficiaries face a stamp duty charge, commonly cited around 10%, on the transferred value. That makes Portugal meaningfully friendlier than the UK for direct-family succession in headline terms, but the exemption's exact scope and the notarial process for foreign-owned Portuguese assets (particularly property) still varies enough by situation that local notarial and legal advice remains essential — do not assume "Portugal has no inheritance tax" without checking how your specific relationship to the beneficiary and asset type is actually treated.

The EU Succession Regulation and the choice most people never make

Brussels IV, the EU's Succession Regulation, allows many people with EU connections to formally elect the law of their nationality to govern their entire estate, rather than defaulting to the forced-heirship rules of wherever they happen to be resident when they die. This is a real and useful tool for, say, a British or American expat living under a Continental European forced-heirship regime (which can legally require a fixed share of an estate to pass to children regardless of the will's wording) — an explicit election can preserve testamentary freedom that would otherwise be overridden. But this is lawyer-drafting territory, not a DIY checkbox: the election has to be made correctly in the will itself, and getting it wrong can leave an estate in exactly the forced-heirship position the election was meant to avoid.

Why a single will rarely covers a cross-border estate

The most common mistake among long-term expats is assuming one will, drafted once in the home country, covers everything. In practice, most cross-border estate plans work better with jurisdiction-specific wills — one covering assets and beneficiaries under home-country law, another covering property or accounts in the country of residence — carefully drafted so the two do not inadvertently revoke each other, a real risk if drafted independently without coordination. Add a country like the UAE, which has no inheritance tax but where succession for non-Muslim expats has historically defaulted to Sharia-based rules absent a registered will (the DIFC Wills Service exists specifically to let non-Muslim expats register a will that avoids that default), and the pattern holds everywhere: the tax rate is only half the picture. Who actually inherits, and under which country's default rules, is the other half — and it is worth paying a cross-border private-client lawyer to get right rather than assuming any single country's rules simply apply.

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