More people than ever are leaving assets in foreign countries when they die, making administration of their estate more complex. We look at some of the main considerations when dealing with a UK Will and foreign assets.
Foreign assets are frequently acquired by UK citizens, whether it is an overseas bank account opened while working or living abroad, ownership of a holiday home or assets shared with a spouse from another country.
Where overseas assets are not taken into consideration at the time of making a Will, it can make the administration process very complicated for an executor when the time comes.
Individuals resident in England with assets overseas
Where an individual is domiciled in England at the time of their death, all of their assets will be taken into account when calculating Inheritance Tax, wherever they are situated.
The law of England and Wales will be applied to moveable overseas property, such as bank accounts and investments, although not to immoveable property such as real estate.
It is important to make a Will setting out whom you want to inherit overseas assets, or they may be dealt with under the law of that country and they could pass to someone you did not want to inherit.
In some countries, there is a rule of ‘forced heirship’, where a certain share of someone’s estate must be left to particular beneficiaries. Where that person has an English Will, it is possible in some circumstances to avoid this rule.
It is also possible to make more than one Will, for each country in which assets are held. There may be advantages to doing this, but it is a complex area of law and you should speak to a Wills expert before deciding how to proceed.
If you are dealing with the administration of an estate that includes overseas assets, you are advised to take advice from lawyers in the country where the assets are held, to ensure you do not breach their laws and tax requirements.
Individuals resident overseas with assets in England
If you are resident overseas but have assets in the UK, the law that applies to those assets will be the law of England and Wales. Executors will need either a Grant of Probate or a sealed foreign grant giving them authority to deal with the assets.
Where someone not resident in England but with UK assets dies without a Will, their personal representatives are likely to find it particularly difficult to administer the estate. A Grant of Letters of Administration will not be issued until the Probate Registry has sufficient evidence of the deceased’s country of domicile and that the person applying is the right person to have authority under law. An Inheritance Tax account will also need to be provided, confirming that the correct amount of Inheritance Tax has been accounted for to HM Revenue & Customs.
If the person’s original country of origin was a Commonwealth country, the Probate Registry can be asked to reseal a foreign grant instead.
Dealing with foreign assets and estate planning is complex and it is important both to plan carefully for the future and to ensure that you take expert legal advice when doing so.
As well as ensuring that your assets pass to those whom you want to inherit, making the right Will can help your executors deal with your estate without undue difficulty when the time comes.
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We have wide experience in helping clients ensure that they have made adequate provision for overseas assets in their Will.