On 17th August new common rules come into force in 25 out of 28 European Union countries that will govern how inheritance is dealt with in those countries. The new rules will not apply in the UK, Republic of Ireland, or Denmark, but they will affect anyone that owns property in the countries where the new rules will apply.
Under the new rules, if you become habitually resident in a country where the new rules apply you can choose in your Will either for your estate in that country to be distributed either according to the rules of inheritance that apply there, or the rules of the country of your nationality.
If you do not choose which rules apply then the rules of the country in which you are habitually resident at the time of your death will automatically apply to the property you have there.
The country where you are "Habitually Resident" is the place you call home; where you return to after travelling elsewhere. For example, if you spend more than 50% of each year in one country for two years that is your home. This does not have to be a continuous period, so if you have a second home where you spend the majority of the year spread over a number of visits you could be caught by the new rules.
Many of the countries where the new rules apply impose compulsory heirs. You can avoid this by making a valid will dealing with your property in such a country if you specify that English Law is to apply to the distribution of your property there.
The new rules only apply to succession, and not to inheritance tax which will still differ from one country to another.
If you have foreign property and already have Wills you should review them to ensure that all your property will be passed on as you wish, and if you have not yet made Wills it is now vital that you do so.
For more information, or to make an appointment to meet with one of our lawyers, please contact our Norwich branch on 01603 693500 or our Sheringham branch on 01263 823398.
