When it comes to owning property abroad it is important to understand the laws of succession in that jurisdiction in the event of the owner’s death.
In 2015 The EU Succession Regulations (‘the Regulations’) known as Brussels IV came into force. All the countries of the European Union signed up to the Regulations, with the exception of the UK, Ireland and Denmark. These Regulations were introduced to minimise uncertainty between different jurisdictions. Although the UK has not signed up to the Regulations, it will still affect UK nationals who are resident in a country signed up to the Regulation or have a connection to the country signed up to the Regulations (i.e. owning a holiday home).
Before the Regulations were introduced, each EU jurisdiction had its own rules on inheritance and succession. Whilst in England and Wales individuals are able to leave assets to whom they wish, this freedom was not the same around certain EU jurisdictions where ‘forced heirship’ rules applied. In countries such as France, Spain and Italy, individuals were not able to leave their entire estate to their spouses as the laws of succession stated in those countries that an individual must leave a share of their estate to their children.
As different rules applied in different jurisdictions many became confused as to what rules applied in relation to certain assets. English Law on international assets specified that where the deceased was domiciled in England and Wales, assets such as bank accounts and investments (moveable assets) would be subject to English rules of succession. However, assets such as property (immovable assets) would be subject to local jurisdiction rules.
The 2015 Regulations simplified the above in the following ways:-
It is important to note if an individual owns property in a country that is not signed up to the 2015 Regulations then it is advisable that the individual makes a separate will in that country. If you would like advice in relation to including foreign property in your Will, please contact our Private Client Department.