Where succession planning across Hong Kong and the United Kingdom stands now

A family with assets in Hong Kong and the United Kingdom is not managing one estate plan. It is managing two legal systems that share a common-law heritage yet diverge sharply on residence, domicile, forced heirship, trust recognition and the treatment of foreign property. The gap between those systems is where wealth is lost, disputes are seeded and families are surprised.

Succession planning across Hong Kong and the United Kingdom requires a coordinated approach across two distinct legal regimes: Hong Kong law, governed by the Trustee Ordinance (Cap. 29) as substantially reformed with effect from 1 December 2013, and English law, which applies its own domicile-based rules to movable property worldwide and its own situs rules to immovable property. Neither system automatically defers to the other, and a plan built entirely in one jurisdiction will typically produce unintended results in the other.

This analysis examines what is actually at stake, how the two systems interact, where the structural risks sit today, and what an integrated approach looks like in practice.

What is commercially at stake across the Hong Kong–United Kingdom corridor?

The financial exposure is not abstract. A principal with a Hong Kong-domiciled estate holding investment property, listed securities and a family trust, alongside a United Kingdom residential property and a UK pension, is sitting across two inheritance-tax regimes, two probate jurisdictions, two forced-heirship positions and two sets of trustee obligations. Each jurisdiction will apply its own rules independently unless the plan expressly accounts for both.

The United Kingdom applies inheritance tax on a domicile-based test. A person domiciled in the UK for inheritance-tax purposes pays UK inheritance tax on worldwide assets, regardless of where those assets are held. The UK concept of deemed domicile (a statutory rule that treats a long-term UK resident as domiciled there for inheritance-tax purposes) means that a principal who has lived in the UK for a defined period may be subject to UK inheritance tax even if they have never formally abandoned a Hong Kong domicile of origin. That exposure surprises many cross-border families at precisely the wrong moment.

Hong Kong has no inheritance tax. The estate duty regime was abolished in 2006. What Hong Kong does have is a well-developed trust regime, a forced-heirship-free environment and a set of trust-law reforms – particularly the 2013 amendments to the Trustee Ordinance – that make it a structurally attractive succession planning centre for families with Asian wealth.

The commercial stakes, then, are these: a family that plans only for Hong Kong may find that UK inheritance tax reaches into the structure through deemed domicile or through the UK situs rules on immovable property. A family that plans only for the UK may find that Hong Kong-law instruments are given less effect than expected when Mainland-connected assets are involved. Neither outcome is inevitable. Both are avoidable with an integrated plan.

How does the governing framework apply across both systems?

The Trustee Ordinance (Cap. 29), as reformed in 2013, provides the foundational instrument for Hong Kong succession planning. Its key reforms removed the rule against perpetuities and excessive accumulations for Hong Kong trusts, introduced statutory protection for settlors who reserve certain powers without invalidating the trust, and strengthened the anti-forced-heirship firewall. That firewall is directly relevant to cross-border planning: it protects a Hong Kong-law trust against foreign forced-heirship claims, including claims that might arise under a civil-law jurisdiction's mandatory rules.

The United Kingdom's succession regime rests on a different foundation. English law applies the law of the deceased's domicile at death to movable property. For immovable property – primarily UK real estate – English law applies regardless of domicile. This lex situs (the law of the place where property is situated) rule is not disapplied by a Hong Kong trust structure or a carefully drafted will, where the underlying asset is a piece of UK-registered real property.

The interaction between these two instruments is not merely theoretical. Consider a Hong Kong-resident principal who holds UK real property through a personal holding vehicle, has a Hong Kong discretionary trust for family benefit and has lived in the UK for extended periods in the decade before death. The UK inheritance tax analysis may treat worldwide assets as within scope through deemed domicile. The Hong Kong trustee's position turns on the trust deed and governing law. The UK property generates a separate UK probate requirement. These threads do not automatically align.

One point that both systems share: neither requires a single will. A coordinated dual-will structure – one will addressing Hong Kong assets and governed by Hong Kong law, a separate will addressing UK assets and governed by English law – is a standard approach on our desk. The critical discipline is ensuring that the two instruments are drafted to complement rather than revoke each other, and that the governing-law clauses are consistent with the situs of the assets addressed.

How do the two systems compare on forced heirship and trust recognition?

Hong Kong and the United Kingdom both operate within the common-law tradition. Neither has a forced-heirship regime of the civil-law type that mandates fixed shares for children or surviving spouses. This is a significant structural advantage for families who have, in an earlier chapter, been subject to civil-law forced-heirship rules in a jurisdiction of origin – whether in continental Europe, the Middle East, or a civil-law part of Asia.

That said, the two systems differ in important respects. English law contains statutory family provision rules under which a dependent or close family member can apply to a court to vary a distribution that the court considers inadequate. These rules apply to UK-sited property. They are not equivalent to forced heirship, but they introduce a degree of judicial discretion that a purely Hong Kong-centric plan may not anticipate.

Hong Kong has no directly equivalent regime. The Trustee Ordinance's firewall provision is specifically designed to prevent foreign mandatory inheritance rules from overriding a Hong Kong-law trust. In the context of a cross-border family with potential civil-law connections, the Hong Kong trust frequently functions as the structural anchor, with the UK will addressing the UK-sited assets that cannot be effectively structured through the trust.

Trust recognition is the other comparative point. English law recognises trusts under the Hague Convention on the Law Applicable to Trusts and on their Recognition, which the UK incorporated through the Recognition of Trusts Act 1987. Hong Kong is not a signatory to the Hague Convention in its own right, though the common-law recognition of trusts is well established. A Hong Kong-law discretionary trust will generally be recognised in English proceedings as a valid structure, provided the trust deed is properly governed and the trust is genuinely constituted. What English law will not do is allow the trust structure to shield UK real property from UK inheritance tax where the beneficial interest runs to a UK-domiciled settlor.

The practical consequence: the Hong Kong trust is a strong instrument for the Hong Kong-sited and internationally mobile portion of the estate. UK-sited real property requires separate treatment, including a direct assessment of UK inheritance tax exposure and, where appropriate, a UK-law complementary structure.

What does the residence and domicile map look like in practice?

Domicile is the single most contested concept in cross-border succession planning, and it is one that practitioners in both jurisdictions consistently underestimate. Under English private international law, domicile is not residence. It is the legal concept that locates a person's permanent home. A person acquires a domicile of origin at birth, typically the domicile of the father at birth. That domicile is extraordinarily tenacious: it revives if a later-acquired domicile of choice is abandoned.

For a principal born in Hong Kong or another Asian jurisdiction who has relocated to the UK and built a life there, the question of whether they have acquired a domicile of choice in the UK – and whether they have abandoned a Hong Kong or other Asian domicile of origin – is a factual one that turns on conduct, stated intention and a wide range of circumstantial evidence. Courts in both jurisdictions have addressed the question, and the answer is rarely obvious at the time of planning.

The UK's deemed-domicile rules complicate the picture further. For inheritance-tax purposes, the UK statute treats a person as domiciled in the UK if they have been resident there for a defined period. That deemed status applies for inheritance-tax purposes even if the person retains a non-UK domicile under the general private-international-law test. The result can be a situation where a principal is non-domiciled in the UK for succession purposes (so their Hong Kong will governs their movable property) but is deemed-domiciled in the UK for inheritance-tax purposes (so UK inheritance tax applies on worldwide assets). Both outcomes can coexist, and both must be planned for.

In our cross-border practice, we regularly see principals who have taken a position on one of these questions – usually the succession question – without adequately considering the other. The inheritance-tax deemed-domicile position is often the gap.

Where does the structural risk sit today?

The risk environment across this corridor has not fundamentally shifted in recent years, but the volume of families managing assets across Hong Kong and the United Kingdom has increased. Greater Bay Area principals acquiring UK property or educating children in the UK, CIS-connected families using Hong Kong as a neutral structuring hub, and multi-generational families whose members are spread across both jurisdictions – each of these generates the same set of structural questions.

The three risk points we see most often are these.

First, the deemed-domicile gap. As described above, a principal who is approaching or has exceeded the UK residence threshold for deemed-domicile purposes is carrying a worldwide inheritance-tax exposure that may not be reflected in the existing plan. Where that plan was built before the family's UK connection became significant, it almost certainly does not address UK inheritance tax on Hong Kong assets held outside a qualifying trust structure.

Second, the inter-instrument conflict. A principal who has executed a Hong Kong will after a period of UK residence may have inadvertently revoked an earlier UK will, or vice versa, depending on the governing-law and revocation clauses. Dual-will structures require careful drafting to avoid mutual revocation. We review matters each year where a well-intentioned will executed in one jurisdiction has created uncertainty about the effect of an earlier instrument in the other.

Third, the trust-classification divergence. A Hong Kong discretionary trust that holds UK real property indirectly – through a corporate vehicle or a BVI holding entity – may be treated differently by HMRC (His Majesty's Revenue and Customs, the UK's tax authority) and by a Hong Kong trustee. The UK's ten-year charge (a periodic inheritance-tax charge on relevant property trusts) and the UK's treatment of the settlor's reserved powers can produce an inheritance-tax cost that the structure was designed to avoid but in practice does not. The detail turns on the facts of each structure, but the risk category is consistent.

What does the current period specifically add? The UK has been undergoing a series of changes to its non-domiciliary tax regime, moving from the long-standing remittance basis towards a residence-based system for tax purposes. Families in the planning phase should verify the current position before finalising structures with a UK element, as the rules governing offshore assets and UK-resident non-domiciliaries are in a period of transition.

What does an integrated succession plan across these two jurisdictions actually look like?

An integrated plan addresses five components in sequence. None can be left to the other jurisdiction's advisers alone.

The first component is a domicile map. Before any instrument is drafted, the principal's domicile of origin, current domicile, UK residence history and deemed-domicile exposure are assessed as a single question. The output determines which legal system governs movable property on death and whether UK inheritance tax applies on a worldwide or UK-only basis.

The second component is a situs inventory. Every material asset is mapped to its legal situs – the place whose law governs it for succession and inheritance-tax purposes. UK real property is UK-sited regardless of the holding structure. Listed securities are typically sited at the place of registration or the custodian's location, depending on the applicable rule. Hong Kong-incorporated shares are Hong Kong-sited. The inventory tells you which instruments govern which assets and where the inheritance-tax exposure falls.

The third component is the instrument architecture. For most cross-border principals with assets in both jurisdictions, this means a Hong Kong-law will covering Hong Kong-sited and other Asian assets, a UK-law will covering UK-sited assets, and – where the scale and structure justify it – a Hong Kong-law discretionary trust for the non-UK portion of the estate. The trust is constituted to take advantage of the Trustee Ordinance's anti-forced-heirship firewall and the absence of perpetuity limits in Hong Kong law. The two wills are drafted to avoid mutual revocation and to cross-reference the trust where appropriate.

The fourth component is the inheritance-tax position. UK inheritance tax is addressed directly, not through avoidance but through proper structuring of the UK-sited assets and, where the deemed-domicile question is live, through a considered assessment of the principal's residence intentions. A trust structure that unintentionally triggers a ten-year charge or an exit charge is not a solution.

The fifth component is the succession trigger. Who has authority to act on the first day after death? Probate in Hong Kong is a separate process from probate in the UK. A UK grant of probate does not automatically authorise administration of Hong Kong assets, and a Hong Kong grant does not automatically run to UK assets. The plan should specify, in advance, the order of steps and the professional appointments in each jurisdiction.

A Central European industrial family with a principal resident in Hong Kong and children educated in the United Kingdom came to our desk in early 2026. The family held a BVI holding entity above Hong Kong operating interests, UK residential property and a discretionary trust established under an earlier European law. The trust's governing law was inconsistent with the Hong Kong-law assets and did not benefit from the Trustee Ordinance's firewall. We redomiciled the trust, restructured the governing law to Hong Kong, and coordinated with allied counsel in the UK on the inheritance-tax and will architecture. The result was a coherent dual-will structure with a Hong Kong-law trust as the principal vehicle and a UK-specific instrument for the UK real property, with a clear authority chain on the succession trigger.

A second matter, from autumn 2026, involved a family with origins in the Gulf and a principal who had been UK-resident for a significant period. The deemed-domicile exposure had not been factored into the family's existing Hong Kong trust, which was structured as if the principal retained a non-UK domicile for all purposes. Coordinating with allied counsel, we identified the inheritance-tax gap and restructured the trust so that the UK-sited assets were held in a vehicle that separated the UK inheritance-tax exposure from the broader estate. The Hong Kong trust continued to serve its purpose for the non-UK assets.

How does the Hong Kong trust structure interact with UK inheritance tax?

This question is one that our desk encounters in almost every cross-border Hong Kong–UK succession matter, and the answer is fact-specific rather than categorical. Several points apply across most situations.

A Hong Kong-law discretionary trust settled by a non-UK-domiciled settlor, holding non-UK assets, is generally outside the scope of UK inheritance tax on the relevant-property regime. The trust's assets are excluded property for UK purposes so long as the settlor is non-UK-domiciled at the time of settlement. Once a settlor becomes deemed-domiciled in the UK, assets settled into the trust after that point lose their excluded-property status. Assets settled before deemed domicile arose typically retain their position.

The practical implication is a timing question: where a principal is approaching the deemed-domicile threshold, there may be a planning window in which to settle assets into a Hong Kong-law trust before excluded-property status is no longer available. That window has a factual boundary that turns on the principal's precise residence history.

UK real property held inside a trust – whether Hong Kong-law or otherwise – does not benefit from excluded-property treatment. HMRC's position is that UK-sited assets are within scope regardless of the governing law of the trust. Structures that sought to use offshore holding vehicles to remove UK real property from UK inheritance tax have been addressed progressively by UK legislation, and the current position requires careful verification before reliance.

The ten-year charge under the UK's relevant-property regime applies to discretionary trusts holding property within the scope of UK inheritance tax. Where a Hong Kong trust holds UK assets – directly or through a transparent vehicle – the trust may be subject to periodic charges. The charge rate and the calculation method are matters for UK tax advisers; the point here is that a Hong Kong-law trust is not an automatic exemption from UK charges simply by virtue of its governing law.

The sequence of analysis matters: the governing law of the trust determines the trustee's obligations and the structure's validity; UK inheritance tax is then applied as an overlay to the trust's asset base, independently of that governing law. These are two separate questions, and conflating them is one of the most common errors we see in cross-border planning across this corridor.

What foreign advisers consistently get wrong on this interface

Cross-border succession planning across Hong Kong and the United Kingdom attracts well-intentioned advice from counsel in each jurisdiction acting in isolation. The errors that result are structural and costly.

The first category of error is the single-domicile assumption. A UK-focused adviser may assume that a principal who is UK-resident has effectively acquired a UK domicile and plan accordingly. A Hong Kong-focused adviser may assume that the principal's domicile of origin governs and that the UK connection is a residence matter only. Both assumptions are incomplete. The interaction of domicile of origin, domicile of choice and deemed domicile for tax purposes requires a coordinated analysis, not a single-jurisdiction view.

The second category is the will-architecture failure. Advisers unfamiliar with dual-will structures sometimes draft a new will in one jurisdiction without confirming whether it revokes an earlier will in the other. Revocation clauses vary. A broadly drafted revocation in a UK will may extinguish a Hong Kong will that was intended to remain in force. The result is an unintended intestacy for the Hong Kong assets.

The third category is the trust-siting error. It is not uncommon to see a Hong Kong-law trust that includes UK real property in the settled assets, on the assumption that the trust's governing law displaces UK inheritance tax on those assets. It does not. UK-sited real property is within the scope of UK inheritance tax regardless of the trust's governing law, and the structure needs to address that exposure explicitly, not by assumption.

The fourth category is the succession-trigger gap. A principal with assets in two jurisdictions and a single will executed in one of them leaves the surviving family without a clear authority to act on the other side. The first days after death are operationally critical. A plan that does not specify who has authority in each jurisdiction, and in what order, creates a delay that compounds the family's distress and can produce asset-protection failures in the interim.

Our desk works across both sides of this corridor. We regularly advise international groups, founders and family offices on the structure, the instrument architecture and the succession trigger. The work is done in coordination with allied counsel in the relevant jurisdiction – locally licensed Hong Kong firms and UK-qualified lawyers where appropriate – to ensure that the plan holds in both systems.

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• Private Wealth – succession, trust structuring, asset protection and family-office advisory across jurisdictions
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For a structured assessment of your succession and trust position across Hong Kong and the United Kingdom, write to us at info@lockhartyip.com.

If an earlier structure or will arrangement has produced an ambiguous or stalled result, a second read can identify the gap and the routes still open. Contact info@lockhartyip.com.

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This publication is general information and does not constitute legal advice. For advice on your situation, contact info@lockhartyip.com.