New Rules for Property Abroad

In August 20, 2015
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Property Abroad & Death Regulation (EU) No 650/2012 “BRUSSELS IV”

 

If like me you have a holiday home in the  EU States, the new Regulation could be of interest to you!

 

In continental Europe a big part of an Estate (often around half) is reserved for the surviving children of the deceased and must be equally divided between them. This “forced heirship” makes it impossible to disinherit financially irresponsible children; it also makes it hard to reward the deserving by, say, leaving more to a daughter who gave up a career to care for her ailing parents.

 

There are changes due which should enable you to know in advance which law will apply to their succession. This is the objective of Reg.650/2012.

 

If you are resident in England with real estate in France, for example, the laws of forced heirship will apply to that part of your estate in France.

 

From August 17th 2015, when the new regulation comes into operation, the succession rules imposed by forced heirship will change.  Any British national who has property in one of the participating States can choose the country of their habitual residence or nationality as the law to govern who gets what when they die.

 

In other words, they can put a provision in their wills stating that they wish English law to be the applicable law for their assets situated in an EU State.

 

“I, Tom Cat, wish the devolution of my property in Spain to be governed by the law of my nationality”.  Tom can put this provision in his will even if he lives in Spain and not in England.  This is known as a nomination and clients with property in an EU state should consider a new will to take advantage of Regulation 650/2012 and make the appropriate nomination.

 

The new regulation applies to all citizens wherever they hail from, so Bruce, an Australian national, with property in a participating EU State can make a nomination for Australian Law to apply to his property in France.

 

And although the UK has opted out of the Regulation [as have Ireland and Denmark] British nationals can make an election under the laws of those participating States.

 

(Note: Local tax laws will apply to assets in the E.U. and English tax laws will apply on death in the usual way).

 

For English nationals with foreign assets, it would be advisable in most cases for them to make an election that succession to their assets situated in the Brussels IV zone should be via English law.

 

Note: This material is for information purposes only and does not constitute any form of advice or recommendation by us. You should not rely upon it in making any decisions or taking or refraining from taking any action. If you would like us to advise you on any of the matters covered in this material, please contact our office.

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Your capital is at risk. Investments can fluctuate in value and investors may not get the amount back they invest. Tax rules can change at any time.

 

Please remember your home or property may be repossessed if you do not keep up repayments on your mortgage. We give clients the option to pay for mortgage advice by fee rather than commission. Equity Release refers to lifetime mortgages. To understand the features and risks, ask for a personalised illustration.

 

The Financial Conduct Authority do not regulate, Will Writing, Buy to Let Mortgages, Auto Enrolment, Tax Advice and Estate Planning.

 

The opinions contained within this blog, do not constitute financial advice and no action should be taken based on this content alone.

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Redwood Financial Family Wealth & Estate Planners Ltd is Directly Authorised and regulated by the Financial Conduct Authority. FRN number 774469.

Disclaimers

The Financial Conduct Authority do not regulate, Will Writing, Buy to Let Mortgages, Auto-Enrolment, Tax Advice and Estate Planning. Your capital is at risk. Investments can fluctuate in value and investors may not get the amount back they invest. The guidance and/or advice contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK. https://register.fca.org.uk/

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