Are You Aware and Up to date with your overseas tax and inheritance regulations
Many Legal firms both in #UK and overseas advise their client who are the owners of overseas holiday home owners to check tax and inheritance implications. A high percentage of #UK and #Irish residents have invested in overseas property in recent years, but many have neglected to consider the effect this could have on their Will and inheritance tax planning.
Many have no Wills many in the country of residence.
The number of English people that are expected to purchase a holiday or retirement home abroad in the next five years is likely to increase, yet the majority does not understand the implications this will have.
The interaction between UK and foreign succession and inheritance tax law is a complex area and if you are lucky enough to purchase your dream holiday home, or are escaping to the sun for retirement, it is crucial to seek advice on how to manage your overseas assets..
It is important to consult a competent legal practitioner and get advice on the how and why of making a second Will drawn up in the country in which your property is located. Make sure there is no clauses which state that all your other Wills are invalid, and ensure that they are limited to the country in which your property is located otherwise your foreign Will could unintentionally cancel out your UK Will.
It is important to be aware of the different aspect to Inherence Law in the country you now intend to be domiciled. You solicitor should be able to advise you but also consult ex pat communities who will freely provide information.
For instance the inheritance process in Portugal is generally governed by the laws of the deceased’s nationality, thereby avoiding potential conflicts of law; however, if spouses have different nationalities, Portuguese law determines that the national law of the country where they both usually reside is applicable. In the absence of a usual place of residence, Portuguese law provides that the applicable law is that of the country where both spouses have a close family connection.
In certain circumstances, the law of the country where the property is located may become applicable. For example, if the deceased was an owner of property in Portugal, and the law of his/her nationality or residence determines that the law of the country where the deceased’s property is located takes precedence, then Portuguese inheritance law becomes relevant.
Yes it can be complicated so the need for a competent practitioner is essential. Tax implications can be similarly complicated.
Owners of foreign property you may also be expected to pay tax to that country’s government. In countries such as France and Spain, inheritance tax is payable by your beneficiaries at different rates depending on how they are related to you (or not) and how much they are inheriting.
Be aware if you don’t plan well your estate may in effect be subject to double taxation. The UK has treaties for inheritance tax purposes with several countries, and it is important that clients take advice on whether there will be a liability to foreign tax after they have died and also what reliefs are available to reduce any tax payable in the UK.
When your spouse or partner dies the last thing you want is try to sort of Tax or Inheritance issue in your Sun home location. Be wise have your planning on Inheritance and tax completed before you relax in the sun.