Many Chinese people in the UK have obtained permanent residence (ILR), bought houses, and saved pensions, but they have never thought about a question: How will these assets be divided if one person suddenly passes away? The reality may be cruel - does not have a valid will (Will), the law will decide for you, and the result is often not what you want.
Especially starting from April 2025, the UK Inheritance Tax (IHT) will officially shift from "domicile" to "residence-based" rules. People who have lived in the UK for a long time may have their global assets drawn into the UK tax net. This incident has a greater impact on Chinese people who take the route of permanent residence and naturalization than imagined.
If a British permanent resident does not have a will, his assets will be divided according to "intestate succession"
In England and Wales, death without a will is called intestacy (intestate succession) . The property is distributed in a legal order, regardless of your wishes.
If you have a spouse and children: the spouse first takes all personal belongings, plus £322,000 (statutory amount statutory legacy, in effect from July 2023) and half of the remainder; the other half of belongs to the children . In other words, if the house is worth much more than this amount, the spouse may not be able to keep the entire property alone.
⚠️ The most likely to fall into disfavor is unmarried cohabiting partners : Under British law, without marriage or civil partnership, even if they have lived together for more than ten years, they will not get a single point from . Many families accompanying students and accompanying students on visas have no idea about this.
Hard conditions for a valid will (irrespective of visa status)
The good news is that making a will does not depend on whether you have a work permit, study permit or permanent residence - as long as you have assets in the UK, everyone can make one. According to section 9 of Wills Act 1837, a valid will must satisfy:
① Written form; ② Signed by the testator; ③ Two witnesses are present at the same time to witness the signature ; ④ The two witnesses then sign separately.
A frequent error: beneficiary or his spouse cannot be a witness to . Whoever witnesses it loses the bequest under section 15 (the will itself remains valid). So don't try to save trouble by letting your children who want to inherit the property sign.
Inheritance Tax IHT: Global Asset Risks for Permanent and Long-term Residents
The UK inheritance tax threshold (nil-rate band) is £325,000, and the excess is taxed at 40%. If you leave your home to your direct descendants, you can add a residence nil-rate band of £175,000, up to a maximum of £500,000 for a single person and a maximum of £1,000,000 for a couple. These thresholds have been frozen until April 2031, meaning that as house prices rise, more and more ordinary households are caught up.
The most critical thing for Chinese people is the new regulation in April 2025: if you have lived in the UK for 10 years in the past 20 tax years, you will become a "long-term resident", and your global assets (including domestic real estate and deposits) will be included in the scope of UK inheritance tax. Even if you later leave the UK, the assets will still have a "tax tail" of 3 to 10 years. Pensions will also be included in inheritance tax from April 2027. Those who have made it all the way to permanent residence and naturalization are the ones most likely to hit the line.
3 practical suggestions for Chinese people taking the road to permanent residence in the UK
1️⃣ Make a British will as soon as possible. If you already have a will in China, you must also confirm whether it is valid for assets in the UK to avoid conflicts between the two places.
2️⃣ cohabiting partners must arrange in writing. Don’t let people who have been together for many years be eliminated due to a missing piece of paper.
3️⃣ Calculate how many tax years you have lived in the UK - this is directly related to whether global assets are subject to IHT, and is also closely related to the permanent residence/naturalization schedule. can use the 永居计算器 APP to calculate the number of days of residence to .
This article is for reference only. Wills and inheritance tax involve specific personal circumstances. Please consult a licensed attorney or tax accountant before taking any action. The rules are subject to the latest announcement of GOV.UK.
💬 Did you make a will when you took the road to permanent residence in the UK? Married, cohabiting or single status? In the comment area, talk about the asset allocation issues you are most worried about , and we will answer them frequently.
If you find it useful, please forward it to your friends who are also applying for permanent residence in the UK - plan early and have less regrets.
[Data source] GOV.UK inheritance tax thresholds: gov.uk/government/publications/inheritance-tax-nil-rate-band-and-residence-nil-rate-band-thresholds-from-6-april-2026; Wills Act 1837 s.9/s.15: legislation.gov.uk; statutory amount for intestacy: gov.uk/inherits-someone-dies-without-will