Cross-border succession · UK inheritance tax · Information, not legal advice — as at 25 August 2026
Cross-border estates and UK inheritance tax: the double-tax picture
UK inheritance tax reaches the worldwide estate of a long-term UK resident (since April 2025 the test is residence — broadly, ten of the last twenty tax years — rather than domicile) — foreign holiday homes included. So the same French house or Spanish flat can be taxed twice: once locally, once by HMRC. Whether the two taxes offset depends on the corridor. UK–France: a 1963 convention still in force credits French succession duty on French property against UK IHT. UK–Italy: a 1966 convention does the same for Italian tax. UK–Portugal and UK–Spain: no treaty exists — relief comes instead from the UK’s own unilateral rules, which credit overseas tax paid on assets situated overseas against the UK tax on the same assets. In every corridor the credit is capped at the lower of the two taxes, and it must be claimed with evidence — nothing offsets automatically. We state the facts and brief your UK tax adviser precisely; the UK computation itself is theirs.
The question arrives in every UK-connected file, usually put simply: “will we pay tax twice?” The honest answer is: possibly — the same asset can genuinely fall into two systems at once — but in all four of our countries there is machinery to stop the two bills simply stacking. The machinery differs by corridor, and knowing which kind applies is half the comfort.
Why two systems reach the same asset at all
The local side is straightforward: Portugal, Spain, Italy and France each tax (or, in Portugal’s case for close family, exempt) what passes on death in their country, under their own rules and deadlines — the per-country pictures are here for Portugal, Spain, Italy and France. The UK side changed shape in April 2025: UK inheritance tax is now residence-based — broadly, the worldwide estate of a long-term UK resident (resident in ten of the previous twenty tax years) is within UK IHT, foreign property included — and that exposure continues for a tail of years even after leaving the UK — while others are taxed on UK assets only. For the typical family we act for — a parent who lived in England with a home abroad — the foreign property is usually inside both systems.
The two kinds of relief — treaty and unilateral
UK law relieves the double charge in one of two ways. Where the UK has a death-duties convention with the other country, the treaty allocates taxing rights and gives credit (s.158 IHTA 1984). Where there is no treaty, the UK’s own unilateral relief (s.159 IHTA 1984) credits overseas tax charged on property situated in that country against the UK tax on the same property. Either way, the practical shape is the same: a credit, capped at the lower of the two taxes on the asset — you end up paying, in total, roughly the higher of the two, not the sum. And nothing happens by itself: the credit must be claimed, with evidence of the foreign tax actually paid — one more reason the foreign filings need to be done properly and documented.
The four corridors
France — treaty (1963). The UK–France estate-duty convention, old but fully alive, still governs: French succession duty paid on French real estate is credited against UK IHT on the same property — and the treaty’s own rules decide which country taxes the other French assets, so French bank accounts are checked on each file. Since French inheritance tax is real money for many families (children beyond €100,000 each; up to 60% for non-relatives), this corridor is where the treaty earns its keep.
Italy — treaty (1966). The UK–Italy convention (in force 1968) credits Italian inheritance tax on Italian assets against UK IHT. Italian family rates are so gentle — 4% above €1,000,000 per spouse or child — that the credit is often small, and the real conversation is the UK one. One wrinkle for your UK adviser: the Italian property transfer taxes (the 2% + 1% cadastral and mortgage taxes) are treated less kindly than the inheritance tax itself when it comes to credit.
Portugal — no treaty; often no double charge to relieve. The UK has no death-duties convention with Portugal — but for the commonest family (spouse, children, parents) Portugal charges nothing on inheritance anyway, so there is frequently no Portuguese tax to credit and the estate simply pays its UK bill. Where Portuguese stamp duty is charged — a sibling or an unrelated heir at 10% — the UK’s unilateral relief is the route.
Spain — no treaty; unilateral relief carries the weight. No convention here either, and Spanish inheritance tax genuinely bites some families — though far fewer than the headlines suggest, because regional reliefs (Andalucía’s among the most generous) reduce many close-family bills to little or nothing. Where Spanish tax is paid on Spanish assets, the UK’s unilateral relief credits it against the UK IHT on those assets. One structural point your UK adviser will care about: Spain taxes the heir, the UK taxes the estate — different taxpayers, same asset — which is exactly the kind of mismatch the unilateral rules are built to bridge, and exactly why the claim should be prepared deliberately rather than assumed.
What this means in practice
Three working rules. First, the foreign tax must actually be paid and papered — the local return filed on the local deadline, receipts kept — because the UK credit stands on that evidence; a late or informal local filing can cost real money on the UK side. Second, who inherits changes the tax in every one of these systems — allowances and rates turn on the relationship — so the who-inherits question and any choice-of-law clause feed straight into the tax outcome. Third, the UK computation belongs to your UK tax adviser: home-country tax is not ours — what we do is run the foreign side correctly and on time, and hand your adviser a precise, documented brief of what was paid, where, by whom and on what, so the credit can be claimed cleanly. (Positions stated as at August 2026; both the UK residence-based rules and the regional reliefs move with budgets.)