The quick answer, it depends. Unfortunately, leaving foreign property under your English Will is not as straightforward as it seems. But it can be if the appropriate steps are followed. The below is based on the law of England and Wales.
Step 1: Consider your domicile.
Domicile is an English law concept and is relevant for Inheritance Tax (IHT) purposes as this will determine in which country your estate is liable to pay tax.
The status of your domicile is determined by several factors and there is no statutory definition for it. It is often the country in which you are deemed by law to have permanent home, but not always. It can also be affected by business interests, ownership of property, intention, ties to the community and long-term commitment to reside as well as the country in which you have a Will.
Step 2: Decide whether you would like one Will dealing with all worldwide assets or multiple Wills in varied jurisdictions.
The advantages to having one Will are that the process can be simpler as you can review your assets as a whole which can help when it comes to IHT planning. Additionally, having one Will avoids the possibility of creating a Will in a foreign jurisdiction that inadvertently revokes your English Will.
However, having one Will that deals with all your worldwide assets can complicate the probate process when you pass away. This is because the Will need to be proved in each country that you hold assets which will require the involvement of foreign legal advisors and potentially probate applications in each country.
This can make the process lengthy and expensive. In addition, there is a distinction between movable and immovable assets. Whilst movable assets follow the provisions of the Will prepared in the jurisdiction of the country of your domicile, immovable assets will be dealt with according to the law of the place where the asset is located.
Step 3: Where applicable, consider which law you want to apply to the administration of your estate.
It is important to consider the rules of succession in the jurisdiction in which you hold assets. For example, whilst under English law you have testamentary freedom to draft your Will in accordance with your wishes, other jurisdictions such as France have forced heirship which dictates how your estate will be distributed.
Since 2015, legislation known as “Brussels IV” has attempted to simplify the process for owners of assets in EU member states. Whilst, the UK is not a party to the treaty, the regulation still affects UK nationals with assets in other member states. Where this is the case, the law of the country where you are ‘habitually resident’ at the date of your death, will be the law that applies to the distribution of your estate.
However, you may choose, in your Will, to apply the law of your nationality to the succession and administration of your estate. That said, it is important to note that “Brussels IV” and any specific provision you have made in your Will applies only to the administration of the estate. When you hold assets in another jurisdiction, they will be taxed in accordance with the rules of that country. This is an important consideration if you already have or are thinking about purchasing assets abroad. We highly recommend seeking legal advice to ensure your assets will be appropriately dealt with.
Step 4: Ensure you keep reviewing.
Review your Will every three to five years to ensure it remains up to date and in accordance with your wishes.
How Moore Barlow can help
Our team of expert Wills, tax and trusts solicitors can provide specialist support in this area to ensure you have the best possible advice and help, based on your own unique situation.
