A practical guide to succession planning across Hong Kong and the United Kingdom

A family with assets in Hong Kong and the United Kingdom faces a succession problem that neither jurisdiction solves on its own. The two systems share a common-law foundation, yet they diverge at almost every point that matters in practice: forced heirship, the interaction between residence and domicile, inheritance tax exposure, and the treatment of trusts settled in one jurisdiction while holding assets in the other. The gap between a well-drafted will and an effective succession plan is where wealth is quietly eroded.

Succession planning across Hong Kong and the United Kingdom requires a coordinated, sequenced approach: a situs analysis of every asset class, a clear domicile and residence map, and governing instruments – including wills, trusts and powers of attorney – prepared and tested against both legal systems before either jurisdiction's regime is triggered. Hong Kong law contains no forced-heirship requirement and, since the reform of the Trustee Ordinance (Cap. 29) that took effect on 1 December 2013, offers strong protection against foreign forced-heirship claims. UK inheritance tax and the domicile rules that activate it sit at the other end of the picture. The sequence of steps below is the route our desk follows.

This guide sets out the decision the reader faces, the sequence of steps in order, the gate at each, the common mistake that derails most cross-border plans, and a checklist for assessing whether an existing structure holds.

What decision does the family actually face?

The threshold question is not which will to draft first. It is where each asset sits, what law governs it on death, and whether that law is the same as the law the family expects to apply.

Most families with a Hong Kong–UK profile carry at least three distinct asset categories: Hong Kong-sited assets (shares in a Hong Kong company, real property in Hong Kong, deposits with a Hong Kong bank); UK-sited assets (real property in England and Wales, UK-listed securities, UK pension benefits); and offshore or mobile assets (interests in a BVI or Cayman holding vehicle, financial assets held in an offshore account, beneficial interests under a trust). Each category attracts a different situs rule, a different governing law on death, and a different tax analysis. A plan that addresses only one of the three is incomplete.

In our cross-border practice, the most common entry point is a family that has accumulated Hong Kong and offshore assets over decades, then acquired a UK property – or established UK residence for a family member – without revisiting the succession documents. The UK element rewrites the analysis. UK inheritance tax applies to UK-sited assets regardless of domicile. Once a person acquires a UK domicile of choice or is deemed domiciled under the UK rules, it applies to worldwide assets. That second trigger changes the structure entirely.

The options on the table, at the highest level, are: a coordinated multi-jurisdiction will structure; a trust settled under Hong Kong or an offshore law with clear governing-law provisions; a combination of both; or, where residence and domicile are genuinely in play, a change in the long-term residence or domicile position before the window closes. For many families, the window is shorter than they assume.

Step 1 – Map the asset situs and the domicile position

The first gate in any cross-border succession plan is a complete situs map: every asset class, every jurisdiction, and the applicable succession law for each. Nothing else can be sequenced until this map exists.

For immovable property, most systems – Hong Kong and the UK included – apply the lex situs (the law of the place where the property is situated) to succession. A flat in Hong Kong passes under Hong Kong succession law. A house in Surrey passes under English law. Movables are more nuanced: the general rule applies the law of the deceased's domicile at the time of death, but the UK has specific rules for certain categories, and Hong Kong applies its own regime. Where the deceased holds an interest in a company or trust, the analysis shifts again – to the company's governing law or the trust's proper law.

The domicile map runs in parallel. Domicile of origin is acquired at birth. A domicile of choice requires physical presence in a jurisdiction plus the intention to reside there permanently or indefinitely. The UK rules also introduce a concept of deemed domicile (a tax-law status triggered by a period of UK residence), which is distinct from domicile at common law but activates UK inheritance tax on the worldwide estate. A Hong Kong resident who has spent more than the prescribed period in the UK – without specific planning – may be deemed domiciled for inheritance-tax purposes without any intention of making the UK a permanent home.

The gate at Step 1 is this: the plan cannot proceed until both the situs map and the domicile position are documented and agreed. Any assumption about where domicile lies, without analysis, is a liability.

Step 2 – Identify the forced-heirship and forced-share exposure

Hong Kong imposes no forced-heirship regime. A testator in Hong Kong may leave the entire estate to a single beneficiary, subject to claims under the Inheritance (Provision for Family and Dependants) Ordinance where a dependant is not adequately provided for. But there is no mandatory share for children or other forced heirs, and – critically since the 1 December 2013 reform of the Trustee Ordinance (Cap. 29) – a Hong Kong-law trust's validity and the beneficial interests under it are not susceptible to challenge on the ground that another jurisdiction's forced-heirship rule would allocate assets differently.

The United Kingdom does not have a civil-law forced-heirship system either. English law allows testamentary freedom, with a comparable dependant-relief mechanism under the Inheritance (Provision for Family and Dependants) Act. However, if a family member holds nationality or domicile in a civil-law system – a common situation in families with Chinese Mainland origins – that jurisdiction's forced-heirship rules may assert a claim over assets held in the estate or through a vehicle. The question is whether Hong Kong's firewall provisions can protect trust assets from that external claim.

The gate at Step 2 is identifying whether any family member – settlor, testator or potential beneficiary – is subject to a forced-heirship regime under a third jurisdiction. If the answer is yes, the governing-law provisions of every instrument must be reviewed against the firewall protection available under Hong Kong or the relevant offshore trust law.

Step 3 – Prepare and coordinate the will structure

Most cross-border succession plans require more than one will. A single will, however carefully drafted, creates administrative friction when the estate spans two or more jurisdictions: the probate process in each jurisdiction must be initiated, documents must be translated and re-authenticated, and the sequence of distribution can become entangled. A coordinated multi-jurisdiction will structure – separate wills for Hong Kong assets and UK assets, drawn against the same underlying instructions – reduces that friction significantly.

The key discipline in a multi-will structure is ensuring that each will is explicitly limited to assets in its own jurisdiction, that the two wills do not inadvertently revoke each other, and that the choice-of-law provisions in each are consistent with the situs analysis from Step 1. A UK will drafted without awareness of Hong Kong assets, or a Hong Kong will that purports to dispose of UK real property, produces exactly the complexity the structure is designed to avoid.

For Hong Kong wills, the applicable instrument is the Wills Ordinance (Cap. 30), which sets out the formal requirements for execution and the choice-of-law rules for movables and immovables. For UK wills, the Wills Act 1837 and, for cross-border formal validity, the Wills Act 1963 govern. Neither statute number needs to appear in the instruments themselves, but counsel preparing the documents must work within both.

Powers of attorney – specifically, lasting or enduring powers of attorney covering financial decisions and healthcare – are a parallel exercise. A power executed in Hong Kong under the Powers of Attorney Ordinance (Cap. 31) does not automatically operate in the UK. A separate UK lasting power of attorney, registered with the Office of the Public Guardian, is required for UK assets and institutions to act on it. This step is frequently omitted, and the omission surfaces at the worst possible moment.

The gate at Step 3 is execution: both wills and both powers of attorney executed to the formal requirements of their respective jurisdictions, with originals and certified copies stored accessibly and the existence of the documents notified to the relevant advisers.

Step 4 – Assess the trust option and the governing-law selection

A discretionary trust settled under Hong Kong law and governed by the Trustee Ordinance (Cap. 29) offers specific advantages for the cross-border Hong Kong–UK family. First, there is no rule against perpetuities or excessive accumulations under Hong Kong trust law – the 2013 reform abolished both for Hong Kong trusts, allowing a trust to run for as long as the settlor requires without a mandatory vesting date. Second, the firewall provisions protect the trust against foreign forced-heirship claims. Third, the trustee has wide statutory powers under the amended Ordinance.

Against that, a Hong Kong-law trust holding UK real property is subject to UK inheritance tax on the value of that property if the conditions for a relevant-property charge are met. The trust does not remove UK inheritance-tax exposure for UK-sited assets; it changes the timing and the mechanism, not the underlying liability. A family that settles a Hong Kong discretionary trust and transfers a London flat into it without considering the UK inheritance-tax position has not solved the problem – it has repositioned it.

The decision on whether to use a trust, and which law to govern it, turns on four variables: the nature and situs of the assets; the residence and domicile position of the settlor and the intended beneficiaries; the intended term of the structure; and the appetite for ongoing trustee costs and administration. An offshore trust governed by BVI or Cayman law may suit certain asset profiles better than a Hong Kong-law trust, particularly where the principal holding vehicle is itself offshore. The two approaches are not mutually exclusive.

The gate at Step 4 is selecting a governing law that is consistent with the situs map, the domicile position, and the tax analysis – and documenting the rationale in the trust instrument and the accompanying memorandum of wishes.

For families with BVI holding structures above the Hong Kong operating layer, our guide on wills and estate plans covering BVI assets addresses the specific mechanics of incorporating an offshore vehicle into a succession plan.

Step 5 – Address the UK inheritance tax position directly

UK inheritance tax is the single most frequently underweighted variable in a Hong Kong–UK succession plan. Its territorial reach is wide, its deemed-domicile rules are technical, and the time available to act before the rules apply is often shorter than the family expects.

The basic charge applies at the standard rate on the estate above the nil-rate band threshold. UK-sited assets – real property and, in most cases, UK-incorporated company shares – are within scope regardless of where the deceased was domiciled. For a person who is domiciled or deemed domiciled in the UK, the charge extends to the worldwide estate, including Hong Kong and offshore assets.

Deemed domicile under the UK statutory regime is triggered by a period of UK residence above the prescribed threshold. Once triggered, it applies for a defined period after the person leaves the UK, meaning that departure is not an immediate solution. A Hong Kong resident who was once UK-domiciled, or who has built up UK residence years, may remain within the deemed-domicile perimeter for a period after returning to Hong Kong. The interaction between common-law domicile and the deemed-domicile rule is technical and matters to the analysis.

The planning responses available within the rules include: use of the spousal exemption where spouses are both UK-domiciled or both non-UK-domiciled; structuring UK-sited assets through vehicles that may, on the specific facts, fall outside the charge (bearing in mind that UK rules look through many structures for inheritance-tax purposes); using reliefs such as business property relief or agricultural property relief where the asset qualifies; and, for the long-term international family, managing the domicile and deemed-domicile position through a deliberate residence plan.

The gate at Step 5 is a current, jurisdiction-specific inheritance-tax analysis from advisers admitted in the relevant jurisdictions. This is not a step that can be performed at a general level. The numbers and the timing depend on the specific asset values, the family members' individual positions, and the current state of the rules.

The common mistake: treating the two systems as independent

The error our desk encounters most often is a plan that addresses Hong Kong and the UK in isolation. A Hong Kong solicitor drafts a Hong Kong will and perhaps a trust. A UK solicitor drafts a UK will. Neither set of advisers has seen the full picture. The result is a plan with structural gaps at the join: assets that fall between the two instruments, provisions that are effective in one jurisdiction and void in another, or a trust that produces the desired result under Hong Kong law but triggers an unintended tax event in the UK.

The specific version of this mistake that causes the most difficulty is the undisclosed UK deemed-domicile position. A family member who has accumulated UK residence years – perhaps while children were in school, or while managing a UK business – without formally tracking the years against the statutory threshold may be deemed UK-domiciled without anyone on the Hong Kong side of the plan being aware of it. When the estate is administered, the UK inheritance-tax exposure that was never planned for becomes the principal issue.

A micro-scenario from our practice: a family-office principal based in Hong Kong with long-standing UK property holdings and children educated in the UK came to us in late 2025. A Hong Kong trust had been settled some years earlier, but no one had calculated the principal's UK residence years against the deemed-domicile threshold. On analysis, the principal was already within the deemed-domicile perimeter, and the trust held a proportion of assets that were, on those facts, exposed. We worked with UK-admitted counsel to restructure the trust's UK asset holdings and to document the residence position formally. The window for certain steps was closing; on a different timeline, fewer options would have been available.

The route that avoids this mistake is a single coordinating adviser – working across both jurisdictions – who holds the full picture and instructs UK and Hong Kong counsel from a shared brief. That is the function our desk performs.

For families with Mainland China exposure in the asset base or the family structure, our guide on private trusts for family assets with a Mainland China dimension addresses the additional layer of analysis that applies.

Decision checklist: does the existing structure hold?

Before engaging counsel to build or revise a plan, the following questions identify where the gaps are likely to sit. A "no" or "unsure" answer to any of them is a flag.

• Is there a current situs map listing every asset, the jurisdiction in which it is held, and the succession law that applies to it on death?
• Has the domicile position – common-law domicile of origin and choice, and UK deemed-domicile status – been formally assessed and documented for each family member?
• Are there separate wills for Hong Kong assets and UK assets, each explicitly limited to its own situs and reviewed within the last three years?
• Have the two wills been reviewed together to confirm that neither revokes the other and that their governing-law provisions are consistent?
• Are there lasting or enduring powers of attorney in force in both Hong Kong and the UK for financial decisions and, where relevant, healthcare?
• If a trust is in place, has the governing law been selected with awareness of the UK inheritance-tax position on UK-sited assets held in or through the trust?
• Has the UK inheritance-tax position been analysed by UK-admitted advisers on the basis of current asset values and the current deemed-domicile status of the relevant family members?
• Is there a coordinating adviser who holds the full cross-border picture and has instructed all jurisdiction-specific counsel from a shared brief?

A plan that passes this checklist is not necessarily complete, but it is unlikely to contain a structural gap at the join between the two systems. A plan that fails on more than two points almost certainly does.

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. For a structured assessment of your cross-border succession position across Hong Kong and the United Kingdom, write to us at info@lockhartyip.com.

Interaction with other practices

A succession plan does not sit in isolation. Where the family holds assets through a holding company or offshore vehicle, the holding-structures analysis feeds directly into the succession layer: how shares pass, how nominee arrangements interact with the trust, and whether the structure creates a taxable event on transfer. Where the family is relocating from the UK to Hong Kong – or vice versa – the capital-relocation and tax-residence questions sit upstream of the succession plan and need to be resolved first.

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. For a preliminary read on your succession and estate position across the relevant jurisdictions, email info@lockhartyip.com.

Related practices

• Private Wealth – succession, trusts, asset protection and family-office structuring across jurisdictions
• Holding Structures – cross-border holding and offshore vehicle design for family and corporate groups
• Tax Positions – residence, domicile, FSIE and treaty analysis for international principals

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