I own property abroad, how does it effect my estate?

There are a number of Britons that own property and assets abroad, the majority of these people are relatively wealthy and will have to take time to consider the issues that may impact how these assets are distributed in their will.

You must take into consideration that foreign inheritance laws and taxes may vary to the ones in the UK. You should consider writing a will in the country where your assets reside. Some consider this as an unnecessary expense, and while sometimes this is the case it is a good precaution to take.

One of the reasons to do this is that in the UK your estate will indirectly pass to your beneficiaries via an executor. However in most European countries the estate passes directly to the beneficiaries of the will. The problem with this is that some countries have an inheritance tax regime where transfers to non-relatives, i.e. your executor, are taxed more heavily than transfers to a relative. It follows that the initial transfer of title to your executor could result in a higher tax charge on the estate, which could have been avoided had you written a will in the country where the assets are located.

Another problem to consider when a foreign will is not prepared is the extra work involved as a result. In most countries the relevant documents must be notarised and not just witnessed, and the need to have the necessary documents translated can cause considerable delay. Some countries have strict time limits in which you have to pay the taxes due on death, and failure to pay them within the time limit can lead to fines. You should therefore ensure that when dealing with your estate it is not unnecessarily prolonged as it could result in avoidable fines.

The laws and taxes of each country do vary, that is why it is important to know what you are dealing with.

To summarise, if you have foreign property or assets abroad and are concerned about how they will be distributed among your loved ones on your death then call EAD Solicitors on 0151 735 1000 and speak to someone from our private client department.

 

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