Since the 1980s, the growth of low cost airlines and the lure of better weather have resulted in a steady rise in the number of Britons owning property abroad. EU countries remain popular, with more than 1,000,000 Brits having opted to make their homes in Spain.
This week, new rules governing inheritance laws for expats who die while living abroad came into effect, aiming to simplify some very complicated EU issues of succession.
Peter Gosling, a legal expert in wills and estate planning with Higgs & Sons, has welcomed the new rules which in effect allow EU expats to decide whether they wish their estate to be subject to the succession rules of their country of residence or their home country.
Peter said: “On Monday, August 17, new EU-wide rules, contained in Regulation (EU) No 650/2012, came into force. Broadly speaking, this means that when an EU national dies, the country where they lived will have jurisdiction, and the succession law of that country will apply.
“Although the UK has opted out of this regulation, it has considerable relevance to UK residents and nationals because almost every other European Union member country will apply the new rules.”
He added that the regulation was also of importance to people resident in England who own property in an EU country which has not opted out.
“Under the EU succession regulation you can, in most cases, provide in your wills that English law is to apply to your estate in the EU, including your land and property. Provided that this is done correctly, the authorities in the other member states will apply the English rules on your death.”
This is a fundamental change, as previously foreign law had always applied to foreign land and property, regardless of whether the deceased died resident in England or not.
Peter said: “With immediate effect, you will be able to be resident in England and create an English will that stipulates that English Law is to apply to your entire worldwide estate, including your EU based property. EU member states who are signatory to the regulation will then not apply their own (and sometime draconian forced heirship) rules but apply English law.”
The regulation does not deal with tax matters, including inheritance tax as national law determines how inheritance tax is calculated.
“This is a good piece of planning news,” added Peter, “however, the precise implications are currently uncertain as the UK has opted out of the regulation. What is certain though is that if you own property in the EU, you should be reviewing your wills and succession planning in light of the changes. Your will needs to state that you wish English law to govern your inheritance.”
Higgs and Sons represent a wide range of clients, including corporates, financial institutions, as well as private individuals, many of whom do business outside of England & Wales and increasingly owning residential property abroad. A number of the firm’s private client partners have been engaged in international work for many years, and have built up an established network of lawyers, accountants and other professional advisers around the world to enable Higgs & Sons to provide clients with access to a network of leading professionals.
If you own property abroad or are thinking of purchasing property abroad then contact Higgs & Sons who understand and acknowledge the family issues and the English implications of foreign property ownership.