When taxes rise, wealth moves: a new era for UK and US succession planning
As UK inheritance tax rules expand and US policy evolves, advisers are reassessing how internationally mobile families should approach wealth, residence and succession planning.
Succession planning is receiving greater attention as tax rules evolve on both sides of the Atlantic, prompting advisers to reassess how internationally mobile families structure wealth, residence and long-term governance. While the UK is moving towards a broader and more expansive inheritance tax regime, the US continues to offer comparatively generous federal estate tax exemptions, albeit within an increasingly fragmented state-level landscape.
In the UK, the inheritance tax regime shifted onto a residence-based footing from 6 April 2025, replacing the old domicile test as the key determinant for many cross-border cases. Individuals are now generally subject to IHT on their worldwide assets if they have been UK tax resident for at least 10 of the previous 20 tax years.
Further changes are due from 6 April 2026, when the government will limit the full 100% rate of business and agricultural property relief to a combined £2.5 million per individual, with qualifying assets above that level typically receiving only 50% relief. From 6 April 2027, most unused pension funds and pension death benefits are also expected to fall within the scope of inheritance tax. Taken together, these measures are likely to bring significantly more families, including business owners, farmers, pension holders and former non-doms, into the IHT net.
In the US, federal estate tax exemptions remain high, at $15 million per individual or $30 million for a married couple with full portability. However, this headline generosity sits alongside a more complex picture at state level, where exemptions are often far lower and proposals to increase taxes continue to emerge.
In New York, for example, a proposal has been put forward to reduce the estate tax exemption from around $7.35 million to $750,000 and raise the top rate from 16% to as high as 50%. Zohran Mamdani, now mayor of New York City, has publicly supported the idea, although any such change would require approval by the New York State Legislature and the Governor, and remains uncertain.
At the same time, the UK is attracting renewed interest from internationally mobile families, including US citizens, partly driven by the new four-year Foreign Income and Gains regime for new arrivals.
Against that backdrop, advisers are increasingly being asked the same question: what practical steps should internationally mobile families, business owners and trustees be taking now, and how might this combination of UK reform and US complexity reshape succession planning over the next 12 to 24 months?
Advisers say the focus is now firmly on acting early and planning across jurisdictions
Nimesh Shah, CEO, Blick Rothenberg, who hosts the firm’s ‘The Tax Factor’ podcast, said: “As governments on both sides of the Atlantic look to make significant shifts in tax policy, families cannot afford to defer succession planning. The UK has already moved to a 10-year residence based inheritance tax regime, tightened reliefs and then there is the prospect of pensions entering the IHT net in April 2027; combined with increasingly assertive state level proposals in the US, it will mean materially more UK/US wealth will be exposed to capital tax. Advisors should be helping internationally mobile families map their global footprint, assess where value is held, and model future tax exposures under multiple scenarios. For clients, the priority now is to accelerate decision making: revisiting holding structures, evaluating the viability of family investment companies, strengthening governance around trusts, and ensuring that cross border estate plans remain coherent as rules diverge. The next 12 to 24 months will reward those who act early, stay flexible, and approach succession planning as an ongoing strategic discipline rather than a reactive compliance exercise.”
That shift is taking place against a backdrop of wider economic and geopolitical uncertainty
Gary Ashford, partner at Harbottle & Lewis, who previously held a senior role at the HMRC, said: “We are living in very uncertain times, arguably more disruptive than any other time post-war. The traditional western developed economies are swamped in debt and one region where many were looking towards as a shining beacon of opportunity, the Middle East, is also now under significant short-term stress: though personally, I think it will reclaim its reputation.”
“Despite the challenging environment, there are still some attractive low taxation territories around the UK and Europe, such as the Channel Islands, the Isle of Man, Gibraltar, Monaco, Cyprus and Malta. Most of these locations also have very attractive capital tax regimes, often with no capital taxes at all. Italy, Switzerland and Portugal are currently also viable options and present significant opportunities for those wishing to maintain the wider developed economy lifestyle. Incidentally, the UK is not unattractive, given the new FIG (Foreign Income and Gains) regime and the fact that the changes to IHT mentioned are focused on long-term residents, meaning those who have been resident for 10 years or more, or UK situs assets.”
Stocks and securities do not qualify for FIG exemption for transatlantic families
Ashford continues. “We are seeing quite a number of transatlantic families moving in, but so far they are largely also seeking a plan on where to go before the benefits of FIG run out. The problem for the UK is that those tax-free assets may end up being enjoyed elsewhere. The plea therefore remains to increase the period of FIG protection and create a much better environment for family wealth succession. An additional point of note, particularly for transatlantic arrivals, is that those with employment-related stock or securities may well need to undertake significant restructuring exercises prior to arrival, on the basis such assets do not qualify for FIG exemption.”
“In the meantime, for those clients who cannot leave, we are seeing a trend of downsizing of wealth or estates, for example by gifting or disposing of assets, possibly also linked to a next-generation departure plan, quite often to the locations mentioned above.
For UK advisers, the scale of recent reform is already reshaping client conversations
James Quarmby, partner, London, Stephenson Harwood, who frequently appears in high profile press including Newsnight and BBC news, said: “Since 2025 the world has changed, suddenly large swathes of wealth are included for the first time within the IHT net, from farmers and business owners to pensioners and former non-doms. It’s the largest single expansion of IHT in several generations and advisors need to respond appropriately. The rate of IHT in the UK is very high, at 40% on ‘normal assets’ and 20% on business/farming assets and most clients view a tax on death to be unfair, bordering on outrageous, meaning that the urge to do planning is very high. Clients should be considering making lifetime gifts, whether structured or not, or simply to leave the UK to get outside of the IHT net altogether. When taxes on wealth expand, wealth moves. We will see that in spades in the coming years.”
However, timing is critical
Trevor Egan, partner US/UK tax, Buzzacott whos is a a recognised authority on the US/UK tax treaty, said: “I am no longer proposing that my clients attempt any meaningful restructuring prior to 6 April, in response to, say, the APR and BPR changes. They would have left it a little too late to start doing things now.”
He continued: “Internationally mobile families will find it easier to up sticks and leave the UK than most. Leaving the UK is now a guaranteed IHT mitigation technique. Once you have been non-resident 10 years, the IHT charge is no more (other than on UK assets). For instance, there will have been those long-term non-UK resident Brits who, at a stroke, will have become UK inheritance tax free on 6 April 2025 by virtue of having lived overseas for 10 years or more.”
He added: “The 10-year non-residence requirement is reduced for individuals having lived in the UK for fewer than 20 years prior to departure. The post-departure exposure window could be reduced even further for those able to take advantage of the handful of Estate Tax Treaties the UK has signed up to. Consideration should, of course, always be given to any non-UK estate tax requirements, particularly when looking at moving a tax home.”
He said: “Passing on pensions will now come with an IHT hit post 5 April 2027. The Government has recently confirmed that it will not be performing a U-turn on this proposal. Under the US/UK Estate Tax Treaty there is potential scope to mitigate this tax exposure for trust-based pensions for non-UK nationals, US domiciled at the time the pension was established. Where this relief is not available a dramatic rethink of pension planning will be necessary to counter the additional tax burden. Individuals may no longer treat pensions as the last pots to draw on during lifetime; passing them on tax free instead. Regular gifting out of income still enjoys IHT exemption. Taking pension distributions, paying income tax on it, and making gifts out of what is left might become the preferable answer post April 2027.”
Across the Atlantic, the picture is different but no less nuanced
Joshua S. Rubenstein, partner and global chair of the private wealth department of Katten, one of the most prominent trusts and estates lawyers in the United States, said: “In the United States, both the Federal government and states impose estate taxes and income taxes (some cities impose income taxes as well). Federal estate tax exemptions are generous ($15 million per taxpayer, and $30 million for a married couple). It used to be that state exemptions matched Federal exemptions, in the case of those states that impose estate taxes (not all do), increasingly the state exemptions are lower than the Federal exemptions.”
Devil in the detail: choose your US state with care
Rubenstein continues. “California is now proposing a one-time wealth tax, Oregon is proposing an annual wealth tax, and at least NYC mayor Mamdani wants New York State substantially to increase its estate tax. None of these proposals is likely to be enacted, as they would cause an exodus of wealth from any state implementing such tax increases. But it highlights the point that in the case of wealthy people moving to the United States, while it is fine to live wherever they choose, they should first at least consider closely not only state and local taxes, but also the property regimes, marital laws and estate and trust laws of the states under consideration.”
There is also scepticism about how far more aggressive proposals will go
Ronni G. Davidowitz, also a partner at Katten, who was recently recognized in the Citywealth Powerwomen USA awards, said: “With regard to Mayor Mamdani’s expressed wish to reduce the New York State exemption and to raise the tax rate quite significantly, he is without authority to do so as this is a State legislative function. Governor Hochul has already indicated that she would not support his proposal. From a practical standpoint, such an increase would serve to hasten the exodus of high net worth individuals from New York and that would have a deleterious impact on the State’s economy. Hence, this is ill conceived.”
Taken together, these dynamics are reinforcing mobility as a central planning tool
Gerard Joyce, counsel, senior counsel, trusts and estates planning group at Perkins Coie, who previously served as National Head of Trusts and Estates at Fiduciary Trust Company International, said: “There is no doubt that wealth taxes and rising individual tax rates, particularly those targeted at higher-income and higher-wealth taxpayers, are becoming more prevalent across several key U.S. states as well as the U.K. Because many of our private clients are very mobile, they want to understand whether the taxes affect their ability to build wealth efficiently versus facing steep inheritance or estate taxes when transferring wealth to future generations. The UK, at least for the moment, has curtailed the flexibility that the ‘non-dom’ regime afforded so that now, by contrast, relocating to the US, even in California, may actually afford lower ‘death’ taxes (California actually has no estate tax) but would raise the unattractive prospect of the 5% wealth tax along with its administrative burdens, and let’s not forget its 13.3% state tax on income.”
Palm Beach or Mayfair: the tax office doesn’t care
He added: “Relocating requires planning that is very detailed and ideally models the legal, tax, logistical and personal circumstances in one’s new life whether the move is to Palm Beach or Mayfair. The new tax measures vary by jurisdictions and are of course not all the same. In analyzing potential taxes, the timeframes must be considered. For example, one tax system may have more favorable short-term consequences such as the UK where individuals who are new to the UK may take advantage of the new 4-year holiday from non-UK source income and gains under the new “FIG” regime; they will then need a continuation or exit plan. With respect to longer-term consequences, individuals relocating to the US may enjoy higher exemptions and favorable tax planning vehicles, but should these individuals wish to leave the US, they may face almost irreversible tax consequences after becoming a US citizen or a ‘long-term’ green card holder.”
He continued: “Mobility and relocation can wreak havoc on succession plans because as the location of advisors, trustees, assets and structures changes, so will the tax and legal framework. Advisors need to be able to respond to these tax changes with an understanding of how a change in jurisdiction can help deal with these new taxes without bringing about a new set of tax, legal and governance challenges.”
He added: “Again, the clear trend in client behavior is mobility: relocation is emerging as a natural response to changes in the tax and other laws. As a result, they are asking their advisors to evaluate not only the consequences of a possible relocation but also to devise methods to mitigate the impact of these new and often costlier tax rules. For example, many Americans in the UK may consider whether they can claim domicile in the US and seek to avoid the impact of the new IHT on non-UK assets. While these are not back-of-the-envelope processes, they can also pay huge dividends if they point the way to properly avoiding a tax that might otherwise be due.”
For globally connected families, this is changing how succession is structured at a fundamental level.
Hetal Sanghvi, partner, tax, India desk lead at Edwin Coe who is a a qualified Chartered Tax Adviser, said: “Many of the ultra-high-net-worth families I deal with might have built their wealth in places such as India or parts of Africa, while their children are educated in the UK and often settle here later in life. That creates a very different set of succession questions. Families are thinking much earlier about how wealth will move between generations and how it should be structured across jurisdictions. A lot of the conversations we’re having now are making sure structures are in place earlier such that the risk of the next generation inheriting assets in their personal capacity is limited. That can make a significant difference where UK inheritance tax exposure is concerned. So, the focus is shifting. It’s no longer just about tax reductions, but more about managing global families, asset protection and long-term succession in a much more coordinated way.”
As structures span more jurisdictions, the demands on governance and coordination increase.
Scott Weaver, general counsel and chief fiduciary officer at Willow Street, who acts as a key thought partner to client families as a trust and fiduciary services provider, said: “The world of family governance and wealth transfer planning is not immune to the evolution of local, regional, and national economic and tax policy. Multi-jurisdictional families of wealth continue to face challenges to design and implement thoughtful, aligned succession plans. Particularly in the cross-border space, these structures are technically and administratively complex as they must be harmonized across multiple tax and legal frameworks. Most importantly, families must retain expert advisors, in all relevant jurisdictions, and remain proactive. Reactive, tax-motivated planning often results in short-sighted, rigid structures. Instead, families must first gauge their priorities and values and let those drive planning choices. We advise families to prioritize optionality and user experience, i.e. ensure that structures and jurisdictions remain flexible for inevitable future changes in policy and adapt to changes in family goals and needs. Finally, most wealth planning structures require expert administration as well as expert design. Poor administration may weaken or entirely undermine a technically superb structure. Responsive, sophisticated, and aligned attorneys, accountants, wealth managers, and fiduciaries significantly mitigate risks associated with complex cross-border structures and support rising family leaders.”
Yet beyond tax and structure, succession planning remains as much about people as it does about wealth.
Richard Montague, a private wealth partner at BDO, who is one of the firm’s most senior and internationally focused private wealth advisers, said: “A succession plan only exists when it’s actively communicated, tested and followed through. Many wealth holders think they have prepared for the worst, but our recent research highlights that, in an effort to avoid difficult conversations and protect relationships today, many are missing key steps and unintentionally creating further sources of tension and confusion in the future. Getting clients to talk to their families about an agreed plan for future finances is the most important task for any adviser. The 6 April deadline for the new IHT business and agricultural property rules in the UK has been a useful lever to get business owners to focus on putting plans into action, but rushing transactions through now could be counter-productive unless all the family buy in to the plan.”
BDO published a Wealth report 2026 that surveyed 200 UHNW clients and 100 peers. It found, of that segment, that the majority are experiencing active disagreements over wealth, yet only 30% have implemented succession plans to manage these inevitable conflicts. The research also shows more than 50% of heirs report disagreements over investments.
If there is a single unifying theme emerging from both UK and US developments, it is that mobility is no longer a secondary consideration but a central planning tool. Families are increasingly prepared to move, restructure and rethink long-held assumptions in response to tax policy, and advisers must be ready to guide them through the legal, fiscal and practical consequences of doing so.
Yet recent events also underscore the limits of mobility as a simple solution. The flow of UK wealth to low-tax jurisdictions such as Dubai has been well documented, but geopolitical shocks, including the escalation of tensions involving Iran, have served as a reminder that no location is entirely without risk. As discussed at the recent Citywealth Forum USA, many globally mobile families are now operating not with a single relocation strategy, but with contingency plans spanning multiple jurisdictions. For some, this means having a plan B, C or even D.
Whether this level of complexity is sustainable is another question. Multi-jurisdictional structures bring administrative cost, governance burden and increasing reliance on specialist advice. There is also the longer-term issue of whether such complexity can realistically be handed down to the next generation without creating friction, confusion or unintended risk. In that sense, the challenge for advisers is shifting from identifying technically optimal solutions to designing strategies that are both resilient and usable. In a landscape defined by uncertainty, the goal may no longer be to find a perfect jurisdiction or structure, but to balance flexibility with simplicity. Even with the best advice, the direction of travel raises as many questions as it answers.
Key Takeaways
- Advisers are rethinking UK and US tax planning as policies on inheritance tax and estate tax evolve.
- The UK will impose residence-based inheritance tax starting April 2025, affecting more families and assets.
- US federal estate tax exemptions remain high, but state-level conditions are increasingly complex, affecting mobility planning.
- Clients are encouraged to act early and reassess succession plans, particularly in light of cross-border complexities.
- Mobility has become a central strategy for wealth management, as families seek to navigate new tax rules effectively.
Nimesh Shah’s Citywealth Leaders List profile
Blick Rothenberg’s Citywealth Leaders List profile
Gary Ashford’s Citywealth Leaders List profile
Harbottle & Lewis’ Citywealth Leaders List profile
Stephenson Harwood’s Citywealth Leaders List profile
James Quarmby’s Citywealth Leaders List profile
Hetal Sanghvi’s Citywealth Leaders List profile
Perkins Coie’s Citywealth Leaders List profile
Ronni Davidowitz’s Citywealth Leaders List profile
Katten Muchin Rosenman’s Citywealth Leaders List profile
Joshua Rubenstein’s Citywealth Leaders List profile
Buzzacott’s Citywealth Leaders List profile
Willow Street’s Citywealth Leaders List profile
Scott Weaver’s Citywealth Leaders List profile
Edwin Coe’s Citywealth Leaders List profile
BDO’s Citywealth Leaders List profile
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