We’re living in a global society and more and more of us now own property abroad. That could be as an investment, a holiday home or because we’ve got family overseas. Whatever the reason, your will needs to be set up properly to make sure your wishes are honoured. Here’s what you need to know.
Different rules for different countries
It won’t surprise you to hear that different countries have different rules about how you can leave your property when you’re gone. In the UK you can leave your property to whoever you like. (Although, as we’ve mentioned before, you need to think carefully before leaving anyone out.) Some other countries have what are known as forced heirships, where you are legally obliged to leave a certain proportion of your property to your spouse, children, or other dependants. This applies in France, Italy, Spain, Saudi Arabia and Japan. It can be a bit of a minefield if you have a blended family so it’s worth getting proper advice.
Where do you pay tax?
Tax is inevitable wherever you live and we’ll always write your will with this in mind. When you own property abroad your wills need to be written to reflect the tax situation in both countries. The UK has taxation agreements with other countries to prevent you from paying the same tax twice. If you pay inheritance tax in another country you’ll often get a credit so you only pay the difference to HMRC.
The rules depend on where you live and pay tax most of the time. This is quite a complicated subject so I’ll talk more about it in another blog.
Who can make your will?
When you own property abroad, you’ll need a will in that country, as well as in the UK. There are a couple of different ways of doing this. Firstly, you could use a lawyer in that country. This can be straightforward if a solicitor dealt with your conveyancing. The firm you dealt with then might be able to make your will themselves or refer you to another lawyer who can. Secondly, there are UK based firms that deal with other countries, particularly France and Spain.
If we’re making your UK will and you mention owning property abroad, we should be able to refer you to someone suitable. We have a network of solicitors who deal with foreign wills.
Property abroad and UK wills
What if you make a UK will but pass away before you’ve got around to making one in the other country? The good news is that other EU countries will sometimes be willing to use a UK will. It’s an informal arrangement so there’s no guarantee. There is an agreement between EU countries that they will recognise wills in other member states. The UK didn’t sign up, but UK wills were often accepted anyway. We don’t know what effect Brexit will have on this, so we’ll have to wait and see. Generally, the best approach is to make sure you’ve got wills in both countries to be on the safe side.
Do you own property abroad and need to make your will? Get in touch using the form below or call us on 0116 380 0752.