4 November, 2016
In August 2015 the EU Succession Regulation came into force in several European countries. Bournemouth solicitor Sue Adams looks at how this could affect you.
The UK has not adopted the regulation, but the new law nevertheless has the potential to affect the estates of any UK individuals with a connection to any of the 25 EU member states in which the Succession Regulation has direct application.
A UK Will does not automatically cover foreign property. Where you have connections with more than one country, you need to know which country’s law will govern who inherits your estate when you die.
The aim of the new regulation is to provide legal certainty as to which law will apply to the succession of those with connections with more than one country in Europe. Whether the new regulation actually does provide certainty is still open to debate.
How does this new EU Regulation work?
For example, say a British citizen (Bert) has a holiday home in France. He is habitually resident in England. Before the regulation, the law which would apply to Bert’s house in France would be French law – the place where the property is situated. Following the regulation, the law which applies so far as France is concerned is English law – where Bert was habitually resident.
If Bert does nothing, on his death there will be a conflict as to which law applies. England does not recognise the regulation – English law says that French law applies because that is where the house is. French law, under the new regulation, says that English law applies because that is where Bert is habitually resident.
The rules are complex, but Bert can avoid any doubt by electing in his Will that one or other of the English or French law will apply. Under English law, Bert can leave his house in France to whoever he wants – under French law, fixed rules of succession apply.
Options to consider
Until now it has been common place to advise clients with property abroad to have foreign wills in place as well as English wills – now that advice is not so straightforward and there are options to consider.
If you have foreign wills and leave those in place, there will be a conflict between what the EU regulation says and the English law which states that the law of the country where immovable property is situated shall apply to that property.
The regulation not only affects who will inherit your estate, but also who will administer your estate, how your estate is taxed, who can make claims against your estate and which court will decide any dispute about your estate.
It is important therefore that you review your current Will both in the UK and abroad, to see what the likely outcome will be on your death and whether it is necessary to make any changes.
Sue Adams is a dual qualified tax adviser and solicitor in Bournemouth. For further information and advice please contact Steele Raymond Partner Sue Adams, or another member of the Private Client Team, on 01202 204 561 or firstname.lastname@example.org.