Wills and Overseas Property
May 2011
Introduction
Increasingly, many people in the UK own property in other countries – whether they be second homes or investment properties. It is vital that when they decide to whom they wish to leave those properties on their death, that they do so according to the laws of the country in which the property is located rather than trying to dispose of the property using a UK Will.
Often, other countries will have very different succession laws from those here and, if the right processes and documents are not used, then property owners could find that the property passes to someone other than those to whom they would want it to pass and/or that long delays in dealing with the property could be encountered by those dealing with their estate.
For this reason it is recommended that if you own property overseas you take advice from a lawyer in the country where the property is located and if necessary make a Will in that country.
Different overseas succession laws
There are a number of good reasons why you should seek advice from a lawyer based in the country in which the property is situated. These include:- the inheritance laws in some countries provide that the law of that country will deal with how property is disposed of on death whereas other countries provide that the law of the owner’s country will apply. Unless you find out which applies to the country where your property is located then there could be confusion as to what your intentions really were;
- in some countries, the provisions of the law override any intentions of the testator and specify to whom the property may be bequeathed. You may, therefore, need to take additional steps to get around these problems.
Thus, whilst you are free to give your property to whomsoever you wish, in other countries, including France and Spain, some of your estate must pass according to their rules for succession.
Key issues of which you need to be aware
There are a number of key issues which you need to be aware of when dealing with your property overseas and you are advised to take advice from a lawyer with experience of that countries law in resolving them. Those key issues include:- the difference between moveable property and immoveable property – in some countries moveable property (e.g. personal possessions, cars, boats, cash, shares, etc.) is dealt with differently from immoveable property (e.g. land, houses, flats, etc.). Thus moveable property may pass according to the law of the country of the person who owns it, whereas immoveable property will be dealt with according to the law of the country in which it is located. Thus, anyone owning a variety of property abroad will need to ensure that their UK Will deals with any assets not covered by the foreign Will;
- there are likely to be a number of additional expenses and delays in dealing with property abroad together with practical difficulties including communicating with overseas lawyers, language problems and the need for interpreters if your executors do not speak the local language and the expense of executors needing to visit the country in question to deal with formalities;
- the danger of Wills cancelling each other out – if a testator makes two Wills – one abroad and one in this country and the second Will contains a clause revoking all prior Wills – which most Wills do – then the earlier Will made abroad may no longer be valid;
- the potential for tax problems – for example, inheritance tax in the UK applies to the whole of a person’s estate wherever it is situated. If there are also local inheritance taxes to be paid then steps may have to be taken to mitigate the effect of that tax such as seeking relief using any double taxation agreements between this country and the country where the property is located;
- for the purposes of abroad, you need to think about other UK jurisdictions – i.e. other than England and Wales. The laws relating to Wills in Scotland are, for example, very different from those that apply in this country and you should think about ensuring that if you own property in Scotland that you have a Will which is valid under Scottish Law.
For more information
For more information about Wills for those with property overseas:
- Call Richard Nelson LLP on 084 4804 4800;
- Request a call-back using the link on the right of this page;
- Email Richard Nelson LLP at wills@richardnelsonllp.co.uk, or
- Write to Richard Nelson LLP at Castle Court, Cathedral Road, Cardiff CF11 9LJ.