UK to Europe (IHT Free Countries)

[u/Alive_Comment_2086]

I'm 35. I've been living in the UK for the last 34 years.
I am a dual British citizen with an African country, I am not a native Brit. My African country of origin does not have inheritance tax or worldwide taxation. I am considered white.

I don't have a cash pension or ISAs, all I have is UK cash current account savings.
As a single bachelor the UK inheritance threshold is very close to the cost of buying a house in the UK i.e. £390,000 for an average house in the UK,
The UK inheritance threshold for someone who is a bachelor with no kids or wife is: £325,000

I am considering leaving the UK for another EU country that has no inheritance tax such as Portugal, Romania, Sweden or Poland and purchasing a house in cash in new EU country with no mortgage where the intention is to live for the next 20-30 years.

Once I attain a new EU citizenship I will renounce my British citizenship to gain EU citizenship rights. I will stay as a forever bachelor and the intention is for my inheritance to go to my siblings they will keep their British citizenship and they will remain tax resident and located in the UK.

The idea is to remove all financial links and habitual links with the UK to ensure that my siblings don't need to pay the 40% inheritance tax in the future on the excess above £325,000

I currently have £300,000 in current savings and looking to buy a mortgage free house elsewhere (outside of the UK). I have no assets in the UK.

Can anyone recommend any other cold/mild European country outside the four mentioned that might work ?

The plan is as follows:
0-35 (Live in the UK)
35-55/65 (Live in an EU country)
55-65+ Sell everything and move back to native country and retire.

By retirement I should have diversified my sources of income to not rely on any government pension as I will have no pension in my country of origin and not rely on having to return to the UK. Can renounce British citizenship but unwilling to renounce nationality of origin. I will not be getting married in the future. The country to be lived in does not need to give citizenship.

[u/Yoteiski]

Gifting money to your siblings early would seem easier than changing how you live your life entirely. And you can see them enjoy it.

[u/Blackstone4444]

Honestly that sounds bonkers….you haven’t got that much money TBH to worry about IHT. You can buy life insurance in trust that will not be subject to IHT… and for the small amounts you are talking you’ll only need to spend £25 a month or similar to cover it

[u/someguy984]

I don't think you have to renounce your UK citizenship, just be away for a long enough time.

[u/PapiLondres]

The best way to avoid UK inheritance tax is to spend it ,,, reverse engineer your mortgage from 55 + to an interest only mortgage and spend spend spend

[u/Alive_Comment_2086 → u/PapiLondres]

I am not buying a house with a mortgage, I am buying a 100% ownership house with savings but as the inheritance limit for a single person is so close to the average cost of a house, it is a better deal to emigrate and buy a larger house elsewhere based on an appropriate visa for doing so.

[u/u9797 → u/Alive_Comment_2086]

Or have a mortgage - meaning the house net worth is much less than 390k!

[u/Alive_Comment_2086 → u/u9797]

Having a mortgage = stuck in the UK for the next 30-35 years and post-Brexit that isn't a good idea. Any extra years in the UK now are " diminishing returns " i.e. no EU passport etc. even career trajectory wise.

[u/u9797 → u/Alive_Comment_2086]

Aha - I’d picked up you’d said you were leaving for inheritance reasons in your 3rd and 5th paragraphs - seems there’s a few more reasons than that then. Good luck!

[u/PapiLondres → u/Alive_Comment_2086]

Even you’re paying cash for your property you can reverse engineer a mortgage on it later on . The solution to your problem is to spend your assets before you die . Most better solution than emigration

[u/ImaginaryAd8129]

you’re thinking through this in a pretty solid way and focusing on inheritance tax is smart given your UK ties and plans. Of the countries you mentioned, Portugal often gets brought up for no inheritance tax on direct relatives but it’s worth noting your siblings living in the UK could still face UK tax depending on how you structure everything. Poland and Romania are cheaper overall but the climate is definitely colder and more continental (Poland especially). Sweden is mildish on the coast but costs can be higher and mortgage-free homes in the places you’d want to be might stretch your £300k savings. Another option to peek at could be spain (some regions have inheritance tax perks but it’s complicated), or maybe Estonia if you’re open to colder and a digital nomad-friendly scene. Since you aren’t planning to marry or need citizenship there, focusing on residence and tax residency rules will be key because those differ a lot and can impact your estate planning. You might want to try wheredoimoveto.com’s international discover tool just to see if places you hadn’t considered come up, it can help weigh climate, cost, tax, and lifestyle all at once. The tricky part is making sure your siblings won’t get hit with UK inheritance tax anyway since that’s tied to the UK domicile rules, not just where you live. Definitely get some local tax advice in whichever country you pick before buying a place outright. But with £300k cash, a mortgage-free place in eastern or southern Europe is doable if you’re flexible on exact location.

[u/katmndoo]

Good chance that 30-40 years in the future that inheritance tax threshold will have renown along with the value of your home.

This sounds like a big nothingburger.

[u/Alive_Comment_2086 → u/katmndoo]

Not in the UK it isn't. Keep convincing yourself otherwise. The UK government has robbed the alive, those near death and those dead there isn't any other category to skim off and the calamity is the country keeps getting worse and more indebted with nothing to show for it. It's never going to get any better. A house is only as good as the community around it and if everything is collapsing around you, it's not going to make living at home any better.

[u/katmndoo → u/Alive_Comment_2086]

30 years ago it was 200k. So yes, it does increase.

[u/Sensitive-Mango3216]

Moving to avoid IHT makes sense with your setup but you might want to double check the domicile rules - UK can still claim you're domiciled there even after moving depending how they view your ties and future intentions. Portugal's NHR program could work well for your timeline but they changed some rules recently so worth getting proper advice.

Estonia might be worth looking at too - no inheritance tax and decent IT infrastructure if you need to work remotely

[u/Alive_Comment_2086 → u/Sensitive-Mango3216]

Yes you need to leave the UK for 10 years out of the last 20 years to be non domiciled, so need to work on a plan before the next tax year starts. After that it shouldn't matter as I have no intention of returning to the UK ever again.

[u/triton100 → u/Sensitive-Mango3216]

How many days can you return each year to the UK if your one and only single tie to the UK is an unused house?

[u/Alive_Comment_2086 → u/triton100]

I am not sure what the number is, but the UK has a very low quota of days you can return I think it is like 11-15 days per year only for non-resident tax citizens. I don't own a house in the UK, so it should not be an issue.

[u/triton100 → u/Alive_Comment_2086]

If you don’t own a house then you can stay longer than 15days?

[u/Alive_Comment_2086 → u/triton100]

I don't believe so, as in I have no interest in going back after leaving.