Why leaving that place in the sun may have become easier! The EU Succession Regulations

Increasing numbers of us now own property abroad. However when we die, dealing with an estate with assets in different countries can be fraught with problems and complexities and may not end up where we want it to be.

However, new regulations have recently come into force from 17th August 2015 aimed at simplifying the many different, and
sometimes conflicting, laws of the EU countries when it comes to the succession of assets.

These regulations, commonly known as “Brussels IV” have helpful implications for anyone who owns assets in an EU state which has “opted in”.

People will now be able to opt for the law of the country of their nationality to apply to their whole estate wherever it is situated. This could therefore avoid local forced heirship rules which might otherwise apply, commonly in countries such as France and Spain for example.

So, after 17th August 2015, an English national can now make a will which stipulates that English law is to apply to his/her whole
estate, including property in other participating EU member states.

There are a number of important points to note however:

  • These regulations deal with the laws of succession, i.e. who inherits the assets of the estate. They don’t deal with tax matters, including inheritance tax. National law continues to dictate how inheritance tax is calculated and also whether or not it is the estate or the beneficiaries who are liable for payment of the taxes; (this varies considerably within EU member states)
  • Any EU member state which is a signatory to the regulations will have to apply English succession law instead of its own
  • All EU countries will apply these regulations with the exception of the UK, Ireland and Denmark who have opted out.

So take for example a British couple living over here but with a cottage in France. If they do nothing, the cottage will pass in accordance with French law. If they include a choice of English law in their wills, France will apply English law to the cottage enabling them to leave it to whoever they want.

Anyone who might be affected by this should take immediate advice and should revisit their will and consider the implications carefully. It may still be necessary to consider separate wills in different countries. The provisions are complex and could have unexpected results, so great care is needed. But this could have significant benefit for those wishing to leave parts of their estate that are held in other EU member states who have opted into the provisions, to be left to family and friends of their choice – rather than being bound by strict heirship provisions that might otherwise exist in the country where the property situated.

Articles from the newsbrief: Five Year Forward View and integrated care; Super partnerships; Assignment of GP leases; To be in partnership or not to be in partnership; Buying a share in the surgery premises; Who is an appropriate companion at an investigatory meeting.

Click here to read the spring edition of Hempsons’ Practitioners Newsbrief in full.