UK inheritance tax and your Indian estate as a long-term resident

For decades, UK inheritance tax turned on domicile — a slippery concept about where your permanent home really was. From 6 April 2025 the UK dropped domicile here and switched to a residence test that's far easier to apply.

The new pivot is whether you're a "long-term resident". Broadly, if you've been UK-resident in at least 10 of the previous 20 tax years, you're a long-term resident, and your worldwide estate — not just your UK assets — falls within UK inheritance tax. UK residence for this test follows the same rules used for income tax and capital gains.

For an NRI or returning Indian settled in the UK for a decade or more, the effect is direct: the flat in Mumbai, the land in the family town, the Indian shares and deposits are all potentially counted in the UK estate on death, taxed above the nil-rate band. That's a UK question — but it can't be answered without knowing what the Indian assets are worth.

India has no estate tax and no inheritance tax. Estate duty existed once but was abolished in 1985, and Indian income-tax law doesn't treat inherited assets as taxable income. So when someone dies, there's no Indian death tax to pay and nothing to credit against UK tax.

That sounds like the India side is simply nil — but two things still have to come from India, and both are real work.

First, the Indian assets have to be valued for the UK estate. UK inheritance tax is charged on the value of the worldwide estate at death, so each Indian asset needs a defensible figure — a property valuation, the market value of shareholdings, deposit balances — not a guess.

Second, the UK executors usually need written confirmation that no Indian estate or inheritance tax arises, so they can show why nothing is claimed as a credit and why the Indian assets transfer without an Indian tax clearance. "India has no inheritance tax" is true, but an executor wants it stated by someone who can stand behind it.

Mr Kapoor lived in Birmingham for eighteen years, comfortably a long-term resident, and died holding a flat in Delhi, some Indian listed shares and a few fixed deposits, alongside his UK home and pensions. His UK executors are preparing the inheritance tax account and need the worldwide estate valued.

There's no Indian inheritance tax to pay — but the executors can't leave the Indian assets blank. We value the Delhi flat as at the date of death, value the shareholdings at their date-of-death market price, and confirm the deposit balances. We then provide a written confirmation that India levies no estate or inheritance tax and that the assets pass by succession without an Indian death-tax charge.

The executors fold the Indian valuations into the UK estate and use our confirmation to explain the nil Indian position. The family also gets a clean valuation record for transferring the Indian assets to the heirs.

Our deliverable is the India-side estate pack: a defensible valuation of each Indian asset as at the relevant date, supporting documents, and a clear written confirmation that India imposes no estate or inheritance tax and doesn't tax the assets as income in the heir's hands. Where the family is planning ahead rather than dealing with a death, we provide the same valuation and confirmation as a planning input.

This is the India-side counterpart to your UK estate work. The UK inheritance tax account, the UK tax on the worldwide estate, and any reliefs are your UK solicitor's or accountant's job. We don't prepare the UK IHT return or advise on UK inheritance tax — we make sure the Indian assets are properly valued and the Indian position is stated in writing, so the UK estate can be completed without holes.