New EU Succession Regulations Affecting Foreign Wills and Cross-Border Estates

New EU Succession Regulations Affecting Foreign Wills and Cross-Border Estates

Do you own land and property or other assets situated outside of the UK but within the EU?

Where you own property in more than one jurisdiction you may already be aware that questions of inheritance can prove particularly complex.  This is because the various assets, although comprised in the same estate, can nevertheless be subject for this purpose to the laws of different countries.

However new EU regulations are due to come into force on 17 August 2015 which are intended to harmonise the differing, and sometimes conflicting, laws of the different countries in the EU when determining the succession of assets upon death.

The intended effect of the regulations (Regulation (EU) No. 650/2012), sometimes referred to as ‘Brussels IV’, is to make things less complicated so that instead of different countries’ laws applying to different assets, just one country’s laws will govern the succession of all the assets in a deceased’s person’s estate.

The default position is that the law of the country in which the deceased has their ‘habitual residence’ at the time of death will apply and will govern the succession of their whole worldwide estate. People will however be able to opt for the laws of the country of their nationality (or one of their nationalities if they have multiple) to apply to their estate instead by properly setting this out in their Will.

This chosen law does not need to be the law of another EU Member State where nationals of other countries are habitually resident in the EU.

The regulations deal with the laws of succession only i.e. who inherits the assets of the estate and not tax matters such as Inheritance Tax for which separate advice will be necessary.

Notably the UK, Ireland and Denmark have opted out from applying the regulations to property situated in those countries. However, although the UK is therefore not a signatory to these regulations, the regulations are still of considerable relevance to UK residents and nationals who own assets in other participating EU countries.

If you hold assets outside of the UK but within the EU and you believe that these changes might affect you, please contact our Tax Partners, Steve Crompton or Chris Barrington on the details below if you require any advice, including obtaining assistance in connection with making a Will:

Steve Crompton
Partner – Head of Tax
direct dial: 01942 292541
mobile:  07790 840394

Chris Barrington
Tax Partner
direct dial:  01942 292505
mobile:  07730 436070