31 May Can I leave overseas property in my Will?
Find out about non-UK inheritance law and how to protect your properties abroad.
The act of leaving overseas property in a Will isn’t straightforward. Any overseas property you own is naturally subject to the law of the country in which it’s located. And many other countries have markedly different attitudes to inheritance law from the UK.
As such, your UK Will may not necessarily be valid in this situation.
Can I leave overseas property in my Will?
Getting around non-UK inheritance law
In the UK, we’re quite unusual in allowing ownership to pass to whoever the deceased specifies. Many European countries prefer the concept of forced heirship, whereby an estate is automatically passed to children, frequently by-passing any surviving spouse.
Supposing you own a holiday home in France and you die, your property will transfer automatically to your children and be divided equally between them. Your surviving spouse will only receive a life-interest, allowing him or her to live there for the rest of their life.
This situation has now been addressed by an EU law enacted in 2015, which allows you to leave property according to the law of your country of origin. However, to take advantage of this requires an opt-in. It is not applied automatically.
Will this EU law survive Brexit?
As with so much else, it’s not clear whether this law will survive Brexit negotiations. For this reason, it’s important to keep up to date with the law and seek professional advice. Nor does the law cover property owned outside the EU.
Make a second Will in the relevant country
In some circumstances, the most convenient way of circumventing the different legislative structures is by making a second Will according to the law of the country concerned. This will necessitate you taking legal advice in that country.
You will need to redraft your existing UK Will to reflect this, as most Wills in England and Wales include a clause revoking all and any other Wills. This nullifies any overseas Will in the eyes of the English law, leaving your property abroad unprotected unless you have drafted a new UK Will taking into account the existence of the second.
What about inheritance tax?
As with national inheritance laws, foreign countries have wildly differing tax laws too.
Reciprocal tax arrangements should mean that you only have to pay once, but it’s up to you to ensure that this is handled correctly and in your best interests.
How to proceed
Laws governing property inheritance and death duties are as diverse as the countries to which they apply. Every nation has its own laws formulated over hundreds of years in line with local tradition. In most cases, any property you own overseas will be subject to their laws first.
With this knowledge, it’s worth looking into laws in the jurisdiction you’re concerned with, and finding out how they relate to those in the UK.
So: Can I leave overseas property in my Will? In short, if you own property overseas, you can’t rely on what is written in your UK Will. A professional will be able to advise you on how best to approach the matter. As soon as you buy foreign property you are advised to take care of it through your Will to protect it in the event of unforeseen circumstances.