A good time to get legal advice if you have property abroad

With the EU Referendum done and dusted, this may be a good time to consider some relevant areas of law if on your death you own assets abroad.

It has long been advisable that if you own immovable assets abroad (principally property), you should make a Will under the laws of that jurisdiction to cover those assets, otherwise on death it can be quite complicated for those assets to be dealt with. It is very important to make sure that a UK or foreign Will does not revoke the other one by mistake. The advice of a good Solicitor should therefore always be sought when making a Will.

When you die, it must first be established where you were domiciled. This is important because the place of domicile will determine whose inheritance tax laws (or equivalent) will apply to your estate. Domicile (legally) is different from residency. Residency is largely a matter of fact, but has no relevance when administering an estate.

Without attempting to clearly define domicile, in essence if France was your permanent home (and had been for some time), and the relevant evidence suggested that you weren’t liable to come back and live permanently again the UK, HMRC might accept that your domicile was France. In this case, then your estate would be taxed based on French Inheritance Tax law.

Secondly whilst in the UK you can leave your estate to whoever you choose, be it relatives, friends or charities, the position has for many a year not been the same if you own assets in a foreign jurisdiction. The holiday home in France or Spain immediately springs to mind. In France in particular there is something called ‘forced heirship’ whereby you were only free to leave a proportion of your estate to who you chose, with French law dictating where some of your estate had to go, typically to a spouse or children. The reason for these laws was to see that at least a part of an estate would stay within the family.

From 17 August 2015 however a new EU law has given people the ability to opt for either the laws of their nationality, or their last habitual residence across Europe. Although the UK has opted out of these rules, the changes will still have an impact if a UK citizen owns property or other assets in the EU.

It will probably come as no surprise to hear that these new rules are fairly complicated, and need to be related to a persons actual situation, rather than trying to suggest a blanket approach that covers everyone with assets abroad in a few sentences.  

To conclude, for a UK citizen with assets in the EU, it might be a good time to review their Will, and seek some solid legal advice. Of course with the recent Referendum result whether any particular aspect of EU Law remain applicable in the UK in the long term remains to be seen.

Holmes & Hills Solicitors is a leading law firm in the region with six offices across Essex and Suffolk. Holmes & Hills Solicitors has offices in Colchester (Marks Tey), Braintree, Sudbury, Halstead, Tiptree and Coggeshall.