Do you own a property on the Continent?

New European legislation is being introduced which will potentially affect anyone in England or Wales who owns property elsewhere in Europe and who passes away on or after the 17^th August of this year.  

Its main declaration is that the law of succession shall be the law of the state in which the deceased person had their “habitual residence” at the time of their death. In other words, on death, rather than say French law applying to property situated in France, if a person normally resides in Wales, then the law of England and Wales will apply in relation to the succession to that property. At present the UK has not signed up to this directive.

This legislation also provides that an individual may choose, by way of a statement, usually in their Will, that the law of their nationality will apply.

This is significant for UK citizens owning property on the Continent, for it enables the succession to those assets to be dealt with under our legal system, which has no constraints as to how you can leave your property or other assets. This is unlike many European countries who have what we call forced heirship provisions, providing for certain individuals (usually the husband or wife and children) to receive a predetermined share of the assets, which can not only be contrary to what an individual would want but can also result in unnecessary tax being paid.

Unfortunately, there are a number of difficulties in relation to the implementation of these new rules.  These include the following:-

Once 17^th August 2015 has passed and the legislation starts to be tested and used, it should be possible to see how it is going to work in practice and we would advise that everyone with assets elsewhere in Europe should review their Will arrangements in due course to see how the new legislation will affect them and whether a declaration of nationality should be made in their Wills.