Where a will and estate plan covering assets in the United Kingdom stands now

The United Kingdom's inheritance regime has always carried a gravitational pull on international families. Sterling assets, English real property, UK brokerage accounts – these do not sit quietly outside an estate plan simply because the principal lives in Hong Kong or holds a BVI structure above them. In our cross-border private wealth practice, the question we encounter with increasing regularity is not whether UK assets need to be planned around, but how the planning holds together once two legal systems are in the room simultaneously.

A will and estate plan covering assets in the United Kingdom must address at minimum three distinct legal layers: the UK's domestic succession and inheritance-tax rules; the conflict-of-laws analysis that determines which country's law governs each asset class; and the interaction of those rules with the family's Hong Kong, offshore, or civil-law succession documents. Since neither Hong Kong nor the United Kingdom operates a bilateral succession treaty, the interplay is managed through private international law principles in each system – and the sequencing and drafting of documents in each jurisdiction determines whether the plan holds or fractures at the moment it matters most.

This analysis sets out what is commercially at stake, how the governing rules operate and interact, where the divergence between the Hong Kong and UK positions creates the sharpest planning tensions, and where the real risk sits for families who have not revisited their arrangements in recent years.

What is actually at stake for international families with UK assets

UK-situated assets carry inheritance-tax exposure irrespective of where the owner lives, and irrespective of how elegant the offshore structure looks. That exposure – and the question of which succession rules govern the transfer of those assets on death – is what makes the UK a distinctive node on any international family's asset map.

The commercial stakes are straightforward. English real property, UK-listed equities held directly, and cash accounts at UK banks are all subject to UK inheritance tax by reference to their situs. A Hong Kong resident principal with a London flat and a UK brokerage account is not outside the UK inheritance-tax net simply by virtue of domicile or residence outside the United Kingdom. The charge on UK-situs assets applies to non-domiciliaries as well as to those deemed or actually domiciled in the UK. The distinction between those categories – which determines whether the worldwide estate or only the UK-situs estate is in scope – is one of the first questions any plan must answer.

Beyond tax, there is a succession-law question running in parallel. English law applies the law of the deceased's domicile to movable property and the law of the situs to immovable property. That is the standard common-law conflicts rule, and it means the legal structure of succession to a London flat is likely governed by English law as the law of the situs, whatever the principal's personal law or the choice-of-law clause in an offshore trust. The family's Hong Kong will, drafted without reference to English property law, may therefore collide with the formalities and substantive rules that English courts apply to that asset.

We regularly advise families who have run their offshore structure well for years, only to discover – when a European or UK asset enters the frame – that the trust deed's choice-of-law clause does not resolve the situs question for real property. That discovery is best made during planning, not after death.

The governing framework: which rules apply and how they interact

The United Kingdom operates three separate legal systems – England and Wales, Scotland, and Northern Ireland – each with its own succession rules. For most international families, the relevant system is the law of England and Wales, and this analysis proceeds on that basis. Families with Scottish assets face additional complexity, including legal rights (known in Scots law as legitim, a form of forced-heirship entitlement for surviving children), which do not apply in England and Wales.

English succession law is governed by the Wills Act 1837 as subsequently amended, the Administration of Estates Act 1925, and the Inheritance (Provision for Family and Dependants) Act 1975. That last instrument – commonly called the family provision legislation – allows certain categories of person, including spouses, former spouses in some circumstances, and financial dependants, to apply to the English court for reasonable financial provision from the estate, even where a valid will exists. This is a material risk point for international families: a valid will under the law of another jurisdiction does not immunise an estate from a family provision claim if there are English-situs assets and a qualifying applicant.

On the Hong Kong side, the Trustee Ordinance (Cap. 29) – substantially reformed with effect from 1 December 2013 – governs the establishment and administration of Hong Kong-law trusts. The 2013 reform brought several features that make Hong Kong trusts a powerful planning tool in a cross-border context: the abolition of the rule against perpetuities and excessive accumulations for Hong Kong trusts; statutory protection for settlors who reserve certain powers; and a strengthened firewall against foreign forced-heirship claims. A Hong Kong-law trust holding UK assets through a non-UK entity is not, however, automatically protected against UK family provision claims or against UK inheritance tax – the chain of analysis must run in full for each asset and each applicable regime.

The conflict-of-laws position deserves particular attention. The UK has not ratified the Hague Convention on the Law Applicable to Succession to the Estates of Deceased Persons, and the EU Succession Regulation does not apply to the UK following its departure from the European Union. England and Wales therefore applies its own private international law rules: domicile determines the law governing succession to movables; situs governs immovables. For a Hong Kong-resident principal, that generally means Hong Kong law governs succession to movables (subject to any applicable renvoi question), while English law governs succession to English real property.

The practical consequence is that a single family may need valid wills in multiple jurisdictions, drafted by reference to each other, to avoid the situation where a probate grant in one system is inconsistent with or revokes documents relied on in another.

The sequence above describes the standard position. Your matter turns on the documents, the jurisdictions actually engaged, and the order of steps – which is where the route is won or lost.

To discuss how the governing rules apply to your cross-border succession position, contact info@lockhartyip.com.

How does UK inheritance tax engage non-domiciliary families with Hong Kong connections?

UK inheritance tax is the most immediately quantifiable risk in a cross-border estate plan, and it is the point where many international families – and some of their advisers outside the UK – carry a systematic misunderstanding of their exposure. The position for non-domiciliaries is more extensive than is commonly assumed.

A person who is neither domiciled nor deemed domiciled in the United Kingdom is, in principle, subject to UK inheritance tax only on their UK-situs assets. That is a significant limitation compared to the worldwide-estate charge that applies to UK-domiciled individuals. But the scope of UK-situs assets for inheritance-tax purposes is broader than an intuitive reading of the conflicts rule might suggest.

UK real property is squarely within scope. UK-registered shares and UK-issued debt instruments are within scope. Cash held at a UK bank is within scope. What is out of scope – generally – are shares in a non-UK company, even if that company holds UK real property. This is where offshore holding structures have historically been used by international families to step out of the direct UK inheritance-tax charge on real property. The UK government substantially closed that position with effect from 6 April 2017, when it brought UK residential property held indirectly through offshore structures into scope. Non-UK companies holding UK residential property are now, in most circumstances, treated as holding UK-situs assets for inheritance-tax purposes, and the shares in those companies may be within scope accordingly.

This is a point where our desk regularly sees positions that were planned pre-2017 still sitting on the books of international families without revision. The offshore envelope that was once effective at removing UK residential property from the UK inheritance-tax net may no longer serve that function. The plan needs to be read against the current rules, not the rules that applied when the structure was established.

The deemed domicile concept adds a further dimension. Individuals who have been UK resident for a sufficient number of years within a defined look-back window may be treated as UK domiciled for inheritance-tax purposes even if they are not domiciled in the UK under general law. For a family member who spent years in the UK before relocating to Hong Kong, the question of whether deemed domicile has been triggered – and whether it has been shed by the time of death – is a material planning question, not a technical footnote.

The interaction with Hong Kong's own position is instructive. Hong Kong has no inheritance tax, no estate duty (abolished in 2006), no capital gains tax, and no forced-heirship regime. From a Hong Kong perspective, succession can often be managed flexibly, with the trust and testamentary documents structured around the family's preferences. But the UK-situs assets in the same family's estate introduce a charge and a set of rules that Hong Kong's flexibility does not resolve. The two systems sit in parallel, and a plan that is optimal from the Hong Kong end may be sub-optimal – or actively harmful – when the UK dimension is read alongside it.

What are the specific tension points between Hong Kong and UK succession law?

The tension points are structural, not peripheral, and they present in predictable patterns across the families we advise. Understanding them is the first step in building a plan that works in both systems simultaneously.

The first tension point is the revocation risk. Many jurisdictions treat a subsequent marriage as automatically revoking an earlier will, absent an express declaration. England and Wales follows this rule. Hong Kong's position is similar. Where an international family has wills executed in multiple jurisdictions over different periods, and where the principal has married or remarried in the intervening period, there is a risk that a later will – or a later marriage – has inadvertently revoked an earlier document relied upon for a particular asset or jurisdiction. The problem is compounded where the documents were drafted by different advisers in different countries with no co-ordination between them.

The second tension point is the forced-heirship interface. English law has no civil-law forced-heirship regime. But as noted above, the family provision legislation gives the English court a discretionary jurisdiction to award provision from an estate containing English-situs assets to qualifying applicants who have not been adequately provided for. A discretionary trust or a particular testamentary disposition that is perfectly effective under Hong Kong law – and protected by the Trustee Ordinance's firewall provisions – may not be immune from a family provision application in England if there are English-situs assets. The Hong Kong firewall does not operate as a firewall against English court jurisdiction over English assets.

Scottish legitim (a forced-heirship entitlement for children from the movable estate under Scots law) is the third structural tension point for families with Scottish connections. This does not arise in English law, but where a family holds Scottish property or where the deceased had a Scottish connection relevant to the domicile analysis, the risk of a legitim claim against the movable estate may need to be assessed.

The fourth tension point is the treatment of jointly held property. English law recognises the joint tenancy as a mechanism for automatic survivorship – assets held as joint tenants pass to the survivor outside the will and outside the estate for succession purposes, though not necessarily outside the estate for inheritance-tax purposes. The interaction between the joint tenancy, the terms of any will, and the provisions of any offshore trust holding other family assets requires careful analysis. A survivorship mechanism that resolves succession elegantly may, for example, leave the surviving co-owner with a UK inheritance-tax charge that the plan did not anticipate.

Consider, as an illustrative pattern: an Asian family with a Hong Kong-resident matriarch, a UK-based adult child, and English real property held in a co-ownership arrangement. The matriarch's Hong Kong will and existing family trust provide adequately for succession across most of the estate. The English property was acquired jointly years earlier, with the intention of providing security for the UK-based child. On the matriarch's death, the survivorship mechanism operates as intended – but the UK inheritance-tax position on the property, and the interaction between the UK-based child's UK tax status and the offshore trust's UK exposure, create a planning problem that neither the Hong Kong will nor the trust deed was drafted to address. The matter reached our desk in the context of an estate review (autumn 2026); the re-sequencing of the holding structure and the coordination of the English-law testamentary documents resolved the principal tensions.

If an earlier filing, structure, or enforcement attempt produced an adverse or stalled result, a second read can identify the strategic error and the routes still open. Write to us at info@lockhartyip.com to discuss your cross-border succession position.

The comparative read: where the systems align, and where they diverge

Both Hong Kong and the United Kingdom operate common-law succession systems, which provides a degree of shared conceptual vocabulary. Both recognise the trust as a legitimate and effective succession-planning vehicle. Both apply the law of the situs to immovable property and the law of the domicile to movables, at least as a starting point. That common-law alignment means that documents drafted in one system are not entirely opaque to courts in the other.

Where the systems diverge, the divergence is significant.

Hong Kong has no forced-heirship regime whatsoever. A Hong Kong-domiciled testator may, in principle, leave the entirety of the estate to a charitable foundation, a discretionary trust, or an unrelated party, with no entitlement for surviving children or other relatives beyond what the testator chooses to provide. Hong Kong's family provision legislation imposes a more limited obligation than its English counterpart, and the Trustee Ordinance's firewall provisions actively protect Hong Kong-law trusts against foreign forced-heirship claims. England's family provision regime, by contrast, gives the court a broader discretion and a wider class of qualifying applicants, including adult children who can demonstrate financial need.

The tax divergence is starker still. Hong Kong has no inheritance tax. The UK's inheritance-tax regime imposes a charge on transfers of value on death, at rates and with reliefs and thresholds that require current advice specific to the family's position and asset composition. The absence of an equivalent charge in Hong Kong means that the structuring of Hong Kong-situs assets has, from a succession-tax perspective, far more latitude than the structuring of UK-situs assets.

The treatment of the offshore trust is another divergence point. A trust settled under Hong Kong law, with a Hong Kong trustee, holding assets including UK-situs investments, is a legitimate and effective structure. But the UK's trust taxation rules – including the charges that can arise on settled property at ten-year anniversaries and on certain distributions – apply to UK-situs assets within such a trust regardless of the governing law of the trust itself. A Hong Kong-law trust is not, for UK trust-tax purposes, outside the UK regime simply because it is not a UK-law trust.

This is a point where the cross-border analysis requires both the Hong Kong perspective and the UK perspective to be run in parallel, not sequentially. A structure that has been optimised from the Hong Kong end without a concurrent UK read may be carrying a trust-tax exposure that has not been factored into the plan.

Where does the risk actually sit now?

In our experience across cross-border succession matters of this kind, the risk concentrates in three places: outdated structures that pre-date material UK rule changes; uncoordinated multi-jurisdiction documents; and the deemed-domicile question for families with historic UK connections.

The 2017 changes that brought indirect holdings of UK residential property into the inheritance-tax scope represent the single most common source of unreviewed exposure we encounter on our desk. International families who established offshore holding structures for UK residential property before 2017 – structures that were at the time effective at managing the inheritance-tax position – may be sitting on arrangements that no longer achieve their original purpose. That is not a theoretical risk. It is a live exposure for any family that has not had the structure reviewed against the current rules.

The documentation risk is equally prevalent. A Hong Kong will that revokes all prior wills – a standard drafting formulation – may, depending on its precise terms, revoke a UK will that was intended to remain in force for UK-situs assets. The solution is co-ordinated drafting, with each document limited by its terms to the assets and jurisdiction it is intended to govern. That co-ordination requires the Hong Kong and English-law advisers to work from the same brief. Where those advisers have never spoken to each other – as is more common than it should be – the revocation risk is real.

The deemed-domicile question is most acute for families where one or more principals spent an extended period in the United Kingdom before relocating to Hong Kong or another Asian centre. The UK's deemed-domicile rules for inheritance-tax purposes are based on years of UK residence within a defined look-back period. A principal who has been back in Hong Kong for several years may have shed deemed domicile; one who returned more recently may not have. The answer determines whether the worldwide estate – or only the UK-situs portion – is within scope of UK inheritance tax on death, which is a material planning variable.

The family provision risk – the ability of qualifying applicants to bring claims against the estate in the English court even where a valid will exists – is perhaps the least well-understood risk among international families with UK assets. The existence of a well-drafted Hong Kong will and a robust offshore trust does not foreclose a family provision claim in England if there are English-situs assets and a qualifying claimant. That risk needs to be factored into the plan, not discovered in contentious proceedings.

Is the family's current plan actually operating as intended across both systems? The honest answer, for most international families with UK assets who have not had a coordinated cross-border review in the last three to five years, is that the plan has not been tested against the current rules in both jurisdictions simultaneously. That is where the work sits.

What foreign advisers often miss in the Hong Kong–UK interface

Counsel advising from a single-jurisdiction perspective – whether that is a Hong Kong trust lawyer who has not read the UK family provision legislation, or a UK probate solicitor who has not engaged with the Hong Kong trust structure – will systematically miss the interface points that determine whether the plan works.

The most common error on the UK side is treating the offshore trust as a black box that resolves succession to the assets within it. For UK-situs assets settled into a Hong Kong-law trust, the UK's own trust-tax and inheritance-tax rules continue to apply by reference to those assets' situs. The governing law of the trust does not displace the UK's tax and succession-law rules in relation to UK-situs property.

The most common error on the Hong Kong side is proceeding with the trust and testamentary documents without a current UK tax read. A Hong Kong trust deed settled with the best intentions, holding UK residential property through a non-UK entity, may be running inheritance-tax exposure that was not identified at the time of settlement and has not been revisited since the 2017 rule changes.

A third error – which sits in neither camp exclusively – is the failure to plan for the UK family provision jurisdiction. International families sometimes proceed on the assumption that a watertight Hong Kong will and a well-drafted trust deed resolve the succession question for all assets. Where the family includes a member who could qualify as an applicant under the English family provision legislation – and where there are English-situs assets – that assumption is incorrect.

For families relocating a family office or principal residence to Hong Kong from a European or UK hub, these questions present with particular urgency. The transition in residence and centre of gravity creates a planning window that should be used to co-ordinate the succession documents across all relevant jurisdictions. Our analysis of that transition context is available at Transferring a family office from a European hub to Hong Kong, which addresses the structural and residence considerations in detail.

Our read on where this is heading

The UK's approach to taxing non-domiciliaries with UK-situs assets has consistently trended towards broader scope and fewer reliefs over the past decade. The 2017 changes to indirect holdings of UK residential property, and the successive reforms to the non-domiciliary regime more broadly, reflect a policy direction that shows no sign of reversal. Families who have not yet revisited their UK-exposure positions should do so now, rather than waiting for the next round of legislative change to create a fresh planning problem.

The interaction between the UK's inheritance-tax regime and the structures commonly used by Hong Kong-based international families – BVI and Cayman holding entities, Hong Kong-law discretionary trusts, multi-generational family structures – is an area where the rules and the structures are not always in dialogue with each other. The structures were often established at a point in time when the rules looked different. The rules have changed. The structures have not always kept pace.

From the Hong Kong perspective, the Trustee Ordinance's 2013 reforms – particularly the abolition of the rule against perpetuities and the strengthened firewall against foreign forced-heirship claims – make Hong Kong a genuinely attractive trust jurisdiction for international families. But those protections operate most effectively when the Hong Kong-law trust is part of a co-ordinated, cross-border plan that has been read against the rules of every jurisdiction where the family holds assets or has members resident. A Hong Kong trust that has not been read against the UK's family provision jurisdiction and UK trust-tax rules is a plan with a gap.

The direction of travel, in our assessment, is towards greater complexity at the interface rather than less. The absence of a bilateral succession treaty between Hong Kong and the United Kingdom means that the resolution of cross-border succession questions continues to rest on private international law principles applied case by case. That is not a stable foundation for a family plan covering significant assets in both jurisdictions. The planning response is a co-ordinated set of documents and structures, reviewed periodically against the current rules in both systems.

What does the family's succession plan actually look like when read in both legal systems simultaneously? That is the question that drives a cross-border review of this kind. For further context on how private trust structures interact with multi-generational family planning in the Hong Kong context, see our matter note at Private trust company: multi-generational family matter.

Related practices

• Private Wealth – succession, trust structuring, and cross-border estate planning for international families
• Holding Structures – reviewing and restructuring offshore holding entities with UK and Asian asset exposure

Speak with Lockhart & Yip

For a scoped view of your matter, contact info@lockhartyip.com. Discuss your matter →

Related

• Private Wealth
• Transferring Family Office From European Hub Hong Kong 5
• Private Trust Company Multi Generational Family Matter

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