Yes, I saw this too. A residence based test would be much easier even if it is a strict one. I’d do something like you are within scope to IHT if you have been resident in the UK for at 1 to 10 or more of the last 20 years. And taper the IHT by 10% increments so you have 100% if you’ve been resident 10 years of the last 20 down to 10% if only 1 year in last 20.
See my post above, it is the location of the assets that is important. The broker is irrelevant.
So this means an UCITS ETF domiciled in Ireland would be not fall under inheritance tax, however if they were to own stock of an UK Company or UK based ETF this would fall under the inheritance tax?
Or if my parents would keep a large amount of cash on IB (which they do not). And then only if thats UK pounds. According to this listing, foreign currency does not fall under the inheritance tax?
When someone living outside the UK dies
If your permanent home (‘domicile’) is abroad, Inheritance Tax is only paid on your UK assets, for example property or bank accounts you have in the UK.
It’s not paid on ‘excluded assets’ like:
- foreign currency accounts with a bank or the Post Office
- overseas pensions
- holdings in authorised unit trusts and open-ended investment companies
Was your mother born in UK to a UK mother and father ?
If “yes” then under the current rules it would mean she probably has UK “domicile of origin” even if she has been resident in Switzerland for 100 years. This is my case.
Under the current rules you needed to pay careful attention to the concepts of domicile vs. residency. Hopefully that is all about to become irrelevant
Yes she was born in the UK to a UK mother and father. What are the implications of a UK “domicile of origin”?
In regard to inheritance tax, would that apply?
Under the current laws she would be liable to UK IHT on her WORLDWIDE assets UNLESS her heirs could demonstrate she has obtained a different “Domicile of Choice” .
Based on what I’ve been told Domicile of Choice is difficult to prove and it is recommended to take active measures to cut ties with the UK. It is not possible to request a ruling.
Search “UK tax establish domicile of choice”
I’ll be so happy if it’s reformed
EDIT: article explaining the current rules and issues
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Separately, are you aware that IB (UK) Ltd is an introducer to IB LLC (US) which is the custodian of the assets? So assets are actually located in US.
Discussed in this thread
So you have US Estate Tax to deal with too!
From memory there is a very high exemption of USD 11m or so that is applicable and the tax itself was not (yet) an issue for me 
However my heirs would have to go through the process of US probate. iirc IBKR would need a notarised certificate of death from Switzerland, and it could take some months to get the assets
There are two things to watch out for:
- The Trump era increases to the exemption limits are temporary and will revert to a lower limit
- The limit itself is not absolute, but apportioned based on relative assets in the US vs. elsewhere. Once you do the apportionment, it might not seem so high.
US estate tax is also independent of the broker’s domicile. You’re potentially affected if you hold US-domiciled stocks or ETFs. However, it shouldn’t matter whether you hold them at IBKR or Swissquote.
location of the broker is not relevant in this case, US situ assets (individual US stocks, US based ETFs VT, etc) fall under estate tax regulations regardless of the broker domicile (IB, Swissquote, ZKB)
As you say, US situs assets are within estate tax anyway. I wondered whether, say, an Irish ETF could be brought within the scope of US estate tax due to being handled via a US broker.
I would hope not, but I know the US likes to over-reach in certain circumstances 
Example
-Fundsmith UK is an open ended fund. It is UK situ (registered office in UK)
-I own it in my account at IBKR UK , which means custody is presumably in the US at IB US
-The fund owns many US companies
I believe it would be out of scope of US Estate tax. Do you agree (?)
Article in the Daily Telegraph (paywall)
"Currently individuals who are UK domiciled – the UK is their home country – but resident abroad, are charged IHT on their estates globally.
However, under plans to move to a ‘residence-based regime’ from April 2025, expatriates who have lived outside of the UK for 10 years or more will only need to pay IHT on assets in the UK."
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Hi Barto,
Thanks for that link. It seems UK Domicile is rather sticky 
So to summarise:
If my mother is deemed UK domicile of origin, it does not matter where the assets are located. Tax will be levied.
If not IB UK will be ok because the assets are located in the US.
Anyway I might contact a legal expert in these matters to see what our options are here.
UK IHT is somtimes jokingly called ‘voluntary’ as with sufficient planning it is possible to avoid it. You can see this old article on how several billions of wealth have been successfully passed down along generations: Inheritance tax: why the new Duke of Westminster will not pay billions | Inheritance tax | The Guardian
Yes, that is my understanding too , assuming that she owns US shares and ETFs
If she is in good health I would not bother contacting a legal expert until the new law is communicated
Not legal or financial advice. Assuming you are resident in Switzerland and not a US citizen, the exemption to the US Estate Tax is decided on your total worldwide wealth, then applied to your US assets only.
Example 1: you own $1M of US assets out of a total of $10M.
You are exempted, your total wealth is below the exception for Swiss residents ($13.61M) in 2024. You probably still have to file some forms to the IRS.
Example 2: you own $1M of US assets out of a total of $15M.
You are above the $13.61M threshold, you will have to pay the US estate tax on your $1M of US assets.
All stocks, ETF, etc domiciled in the US count as US assets. Basically, if you declare them in your DA-1 then they are likely US assets. And some more too (some stocks that pay no dividends are not automatically moved to the DA-1).
Unclear (to me) is how the total wealth is computed with respect to Pillar 2, Pillar3, and real estate property. The IRS probably has different rules than the Swiss taxes.
Be aware that the current exemption will end in 2026 and go back to a previous, lower, value. Unless the next US administration will extend it or change it.
Blog speculating UK IHT may be linked to nationality :
“Long term UK expats are rarely Labour voters so a Labour government is unlikely to want to gift them any favours. We think it is much more likely that it will extend the scope of UK IHT to include anybody who holds a UK passport.”
Caution: the blog is by a firm with a vested interest in people buying trust solutions.