International Succession, foreign Wills and domicile

In the last 20 years, many UK and Irish nationals have “run for the sun” and bought foreign real property in places as diverse as Italy, Spain, Bulgaria, Turkey, Cape Verde and France and owning an overseas holiday home in a sunny location or investing in foreign countries has nowadays become a highlight and enjoyable luxury during a person’s lifetime.

The latest figures from the Office of National Statistics estimates that around 6.2 million Britons live abroad, many of whom own their own property there or draw their pension abroad. The importance of owning these foreign assets should not be overlooked when planning for the future as it is quite common that a standard UK Will is not sufficient to bequeath your estate overseas.

If you have assets located outside England and Wales, it may be advisable to seek advice on the terms of a Will compliant with the legal rules relating to succession and legal formalities of a Will in that country and to have a Will drawn up in the jurisdiction in which these foreign assets are located. If you have a Will in more than one country, it is very important that you inform your lawyers in both countries to avoid any conflict between the Wills and ensure that one has not been revoked by the other.

You must also ensure that legislation in a foreign country in which you have assets does not conflict with your Will. For example, a number of countries have the legal concept of ‘forced heirship’. This can supersede your Will and means that certain individuals may automatically be entitled to an asset in your estate irrespective of your wishes.

At Giambrone we are experienced in advising clients seeking a Will who have assets of an international nature and ensuring that, where necessary, Wills in a different country are also prepared in order to fit in with a person’s succession planning in the UK.

The definition of domicile is a concept that is particular to England and Wales and has consequences for inheritance tax. In English law, everyone has a ‘domicile of origin’, which is usually that of their father’s. This cannot be changed unless you acquire a ‘domicile of choice’, making that country your permanent home with the intention to remain there for the rest of your life. In practice, this can be very difficult and involves severing numerous ties with your ‘domicile of origin’.

Your domicile status is relevant for Inheritance Tax purposes and there can be advantages if you are not domiciled in the UK. This may be the case if either you or your parents are not originally from the UK or if you have permanently moved away from the UK. We can advise on your likely domicile status, how it can be changed and the ways to maximise any Inheritance Tax advantages of not being domiciled in the UK.

There may be adverse Inheritance tax implications if a person domiciled in the UK intends to give assets to their spouse or civil partner either on death or during lifetime and that spouse or civil partner is not domiciled in the UK. If this is relevant to you we can advise on the Inheritance Tax implications of such gifts and the steps that can be taken to mitigate the Inheritance Tax.

Whatever the circumstances, it is advisable to seek specialist advice if you think issues of foreign assets or cross-border domicile may apply to you. Giambrone’s team of expert private client lawyers can guide you through the tax pitfalls and minefields associated with foreign Wills to ensure an integrated approach to all your affairs.