Update: a will and estate plan covering assets UK

A will and estate plan covering assets in the United Kingdom requires careful sequencing across at least two legal systems. The governing instrument in England and Wales is the Wills Act 1837, which continues to apply to immovable property situated in the United Kingdom regardless of where the testator is domiciled or resident. For Hong Kong-based principals with UK assets, this creates a live structural risk that many estate plans do not address.

The trigger is structural, not transactional. An asset holder does not need to move, sell or acquire anything for the problem to crystallise. It exists the moment a Hong Kong-resident principal holds UK property, an English bank account or shares in a UK company without a coordinated cross-border estate plan.

What has brought this to the front of the agenda?

UK inheritance tax policy has moved. The United Kingdom's government has consulted on and then legislated significant changes to the treatment of non-domiciled individuals and UK-situs assets held through offshore structures, with several changes taking effect across 2025 and 2026 – parties should verify the current position, as the rules are in active transition. The practical effect is that structures previously used to hold UK property outside the inheritance tax net are now under review or have been brought inside the charge.

At the same time, the position on domicile (the legal concept governing which jurisdiction's succession law applies to movable property) remains a persistent source of confusion for cross-border families. A Hong Kong principal who holds UK property may be taxed on it under UK rules even where a Hong Kong law will has been carefully prepared. The two questions – which will is valid and which jurisdiction taxes the estate – are not the same question, and conflating them is one of the most common errors we see.

For private wealth clients, our desk advises on the intersection of succession, residence and forced-heirship interaction across the family's full asset map. The UK–Hong Kong corridor is one of the most active in our cross-border practice.

Who is affected across the Hong Kong–UK corridor?

The immediate audience is broad. Hong Kong residents holding UK residential or commercial property are directly in scope. So are principals holding UK-situs assets through BVI or Cayman holding entities, where the inheritance tax treatment of those structures has shifted. UK nationals resident in Hong Kong with assets in both places face a mirror-image version of the same problem: a UK will may not, without more, dispose of Hong Kong assets in the manner intended.

Families with children educated or settled in the United Kingdom add a further layer. The question of whether a child has acquired a UK domicile of choice – which could alter the forced-heirship position on both sides – is fact-sensitive and not always addressed in the estate plan. Hong Kong law has no forced-heirship regime; the United Kingdom does not apply réserve héréditaire (the civil-law forced-share doctrine); but the interaction with the law of a third jurisdiction – for families with roots in Mainland China, the UAE, or continental Europe – can produce unexpected outcomes.

See our Private Wealth practice for the full range of succession and asset-protection work we handle across the region. For the parallel question that arises for UAE-exposed principals, see our note on asset protection with UAE exposure. For the Singapore side of the structuring question, the analytical treatment is at our estate planning analysis covering Singapore assets.

What to do now

Three immediate steps apply to most affected principals.

First, identify all UK-situs assets. This includes direct real property, UK-registered shares, and assets held through offshore vehicles where UK tax authorities may now look through the structure. A holding entity does not automatically remove the UK situs of the underlying asset for all purposes.

Second, review whether the existing will or wills cover UK immovable property under the correct governing law. Under English conflict-of-laws rules, immovable property in England and Wales is governed by the lex situs (the law of the place where the asset is situated). A Hong Kong law will prepared without reference to the UK position may not operate as intended on UK property.

Third, take advice on the inheritance tax position as it currently stands. The rules applicable to non-domiciled individuals have changed, and the treatment of offshore structures holding UK assets is in an active state of legislative revision. Acting on the prior position is a material risk.

To map the options for coordinated UK–Hong Kong estate planning and succession structuring, reach us at info@lockhartyip.com.

Frequently asked questions

What are the main risks in a will and estate plan covering assets in the United Kingdom?

The principal risks are: a Hong Kong law will that does not validly dispose of UK immovable property; an inheritance tax exposure on UK-situs assets held through offshore structures that the existing plan did not anticipate; and a failure to account for domicile rules, which determine which jurisdiction's succession law governs movable property. In our cross-border practice, the domicile question and the inheritance tax position are the two points most frequently left unresolved.

What documents are needed for a will and estate plan covering assets in the United Kingdom?

At a minimum, the file should include: an inventory of UK-situs assets with their legal and beneficial ownership structure; a review of any existing will or wills and whether they address UK property under the correct governing law; evidence of the principal's domicile position; and, where UK inheritance tax is in scope, a current analysis of the tax position on those assets. Where an offshore holding structure is in place, the structure documents and any letter of wishes should also be reviewed in light of the current UK tax rules.

Which jurisdiction's law applies to a will and estate plan covering assets in the United Kingdom?

The answer turns on asset type and domicile. For immovable property in England and Wales – real estate, land – English law applies as the law of the situs regardless of where the testator is domiciled. For movable property, the law of the testator's domicile at death generally governs. A Hong Kong principal may therefore have their movable estate administered under Hong Kong law while their UK property follows English rules. A coordinated estate plan addresses both, with wills in each jurisdiction drafted to operate without conflict.

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

Update: a will and estate plan covering assets in the United Kingdom

What has brought this to the front of the agenda?

Who is affected across the Hong Kong–UK corridor?

What to do now

Frequently asked questions

Speak with Lockhart & Yip

Related

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