UK-born Australians - When One Will is not Enough: Why a Single Australian Will Could Cost Your Family $100,000s

Over 1.1 million UK-born Australians face a ticking tax bomb. With the UK's inheritance tax changes kicking in April 2025, a single Australian will in your drawer could become a financial disaster.

The Shocking Reality

Australia implemented the UNIDROIT Convention on International Wills in March 2015, creating new options for cross-border estate planning. Yet thousands remain dangerously exposed to punitive tax rates reaching 85% when UK inheritance tax combines with Australian CGT.

What's Changed? Everything!

From April 2025, the UK switched from domicile-based to residence-based inheritance tax. If a client has been a UK tax resident for 10+ years in the past 20 years, immediately preceding the tax year of death or the transfer of assets, an inheritance tax of 40% will apply to the value of their worldwide assets, and this would apply to a former UK resident (whether or not born in the UK) living in Australia.

This replaces the previous 15-year rule for long-term residents. There will be a brutal "tail period" of 3-10 years post-departure.

Further, from April 2027, planned Inheritance tax changes will bring previously exempt assets, such as inherited pensions and death benefits, into the scope of the  IHT regime.

The Triple Threat

1. UK and worldwide assets hit with 40% inheritance tax

2. Australian CGT on subsequent asset sales

3. Combined effective rates up to 85%

Addressing these issues, clients will need to consider the merits of:

An International Will 

Recognised across all Convention countries, including Australia, UK, certain US states, Canada, France, and Italy. Must be certified by authorised persons including Australian legal practitioners. But it won't eliminate local tax rules or conflicting succession laws. or

Multiple Jurisdiction-Specific Wills This is the “gold standard”. Separate wills for

UK/US assets enable:

• Faster probate (no international delays)

• Tax optimisation tailored to each jurisdiction

• Local formality compliance

• Strategic asset allocation

The Numbers Don't Lie

With Australia's overseas-born population at 8.6 million (31.5% of residents), this isn't a niche problem. Nearly 50,000 UK working holiday makers arrived in one year alone.

With international tax regimes shifting rapidly and migration patterns accelerating, the days of "one will fits all" are over.

Inherit Australia is dedicated to solving estate planning problems, such as cross-border assets and inheritance tax regimes, by enabling advisers to drive estate planning discussions with their clients in conjunction with a skilled lawyer. Inherit Australia will soon announce the appointment of a prominent UK law firm to its growing panel of esteemed lawyers, helping advisers and their clients navigate these critical issues.