A large proportion of Wills are made with tax planning questions in mind, particularly Inheritance tax which has always been a hot topic amongst voters. Many people feel that after working and paying tax all their lives, then having an additional tax charged upon their death, is undeniably nefarious.
Now there is a new challenge facing us ahead – Brexit. There has never been more uncertainty in Britain since the outcome of the referendum to leave the European Union. Many UK and non-UK nationals who have property across the EU member states are concerned about inheritance tax and succession planning as there has been little to no guidance on what is to come. The government’s ‘wait and see’ approach is too much of a risk for us to be comfortable with.
For those of you who have existing Wills or are planning to make a new Will, it is vital that you seek a Will Writing solicitor who can guide you on these issues, especially if you have property or investments in or outside of the EU.
Our qualified Will Writing solicitors will sit down with you during your estate planning and help map out the contents of your Will in the best way possible. It is important that you let us know if you have property or a business assets overseas so that we can give you the correct advice. Foreign assets bring another level of complexity to your Will and the more information that you provide, the better the advice and tax efficient Will we are able to produce. Today many people, including non-legal professional Will writers, are unaware of recent changes to the law that affect those who have already made their Will. Therefore, it is so important to have a regulated legal professional involved when your are planning the distribution of your estate because there are severe consequences if a Will isn’t properly made.
By the time Brexit happens, it will bring a significant potential disadvantage to those who have property in EU member states or those of you who are planning on purchasing property abroad. The questions you should be asking are how you can protect your assets, including any foreign property from being unnecessarily taxed. Who is it that governs your estate if it is an intestate one (where you die without a Will)? And which jurisdiction taxes apply to your assets?
I have property within the European Union
If you currently have immovable assets within the EU, you must update your Will. You may already be aware of EU countries having ‘forced heirship’ rules, which favour spouses over your children. This has a detrimental effect, not only on your surviving spouse but also unnecessary inheritance tax being paid on your estate.
In France if your Will is not currently up to date then your spouse will only inherit a quarter of your estate and the rest will be left to your children. This will cause significant problems for the survivor, especially if you are both living abroad. One of the advantages of making a UK Will to cover your European assets is that you are given testamentary power to govern the dissolution of your estate in the UK and the rest of the EU as you wish. There should be no complications as to the validity of your Will in the foreign jurisdiction if it is prepared by one of our Will writing solicitors who is up to date on the current laws and regulations.
With the impact of Brexit, these laws will most likely change because whilst other EU countries give their citizens the ability to choose how their estate is governed, the UK will undoubtedly loose this option (but this is yet to be confirmed). However, all is not lost, Brexit will only impact which country’s rules govern your assets and not how your estate will be taxed. You will need to speak to one of our Will writing solicitors who can guide you through and explain how foreign and UK tax laws will apply to your estate and how you should structure your Will.
I have property outside of the European Union
If you have immovable assets, investments or a business outside of the EU, then you should speak to one of our Will writing solicitors who specialise in assets in foreign jurisdictions. A common misconception is that you can produce a ‘global’ Will to cover all your worldwide assets. Unlike other Will writers, our solicitors who regularly advise and focus in these types of Wills would highlight various factors that apply to your circumstances. The truth is, if your Will does not cover your assets properly, then there will be a myriad of conflicts of law principles, coupled with potential costs of court proceedings to determine which country’s laws may apply.
Making a Will post or pre-Brexit with the right advice from our Will writing solicitors will ensure that the contents of your Will complies with local laws and therefore likely to reduce litigation costs as well as shield your assets from foreign tax claims. Our Will Writing solicitors may advise that the best course of action for your circumstances is to produce more than one Will. However. you will need to be careful with multiple Wills to make sure that one Will does not overwrite the other. Our Will writing solicitors who specialise in multijurisdictional assets and Wills can help you with this.
Our Will writing solicitors at Freeman Harris can also help you with planning ahead for the future after your Will has been executed. There are many other factors that influence the cost and complexity of your estate once you’ve passed away. Your executors and family will need help in identifying the assets and liabilities of your estate and help with corresponding with all relevant third parties, especially if it involves engaging with foreign countries. Whether you have a large or small number of foreign assets these will have to be dealt with appropriately and our solicitors at Freeman Harris are experts in these matters. We can help you with complicated multijurisdictional estates and advise you on the most tax efficient way to distribute the estate, even after your loved ones death.
If you would like more information on how Freeman Harris can assist you or your family with making a Will or probate and estate administration, please contact our team on 020 7790 7311 or email us at contact@freemanharris.co.uk.