Owning Assets in the EU post-Brexit: An Inheritance Law Perspective
If you have an elderly relative who owns assets in the European Union, what will happen from an inheritance law perspective, post Brexit?
Now that the Brexit bill has been passed by Parliament, our key partner, Ashtons Legal which has offices in Norfolk, Suffolk and Cambridgeshire, offers this guide.
The referendum on June 23 2016 saw the UK become the second nation to reject outright its membership of the European Union. We are, however, not much further forward in our understanding of exactly what the post Brexit landscape will look like. This article addresses three areas of consideration for those owning assets in the EU post Brexit. Two areas are happily fairly clear; one remains resolutely grey.
Validity of Wills
One of the major concerns that people have who own assets in the EU is whether their Wills will remain valid once we have left the EU. This is one of the few areas where there is a clear answer: yes. The validity of Wills is governed by the Hague Convention which is a set of international regulations which sit outside EU regulation. You can rest assured therefore that if your Will was validly drafted and executed pre-Brexit it will remain valid post-Brexit, so long as your circumstances have not changed since the drafting of the Will.
The EU Succession Regulation
Many of you will be aware of the EU Succession Regulation known as “Brussels IV” which came into force on 17 August 2015. This Regulation aims to simplify successions within the EU by allowing testators to elect for their law of nationality to govern the devolution of their entire estate. The default law otherwise is that of the country where they are habitually resident. Although the UK has not signed up to Brussels IV, UK nationals with assets in EU member states which have adopted the Regulation are still able to include a choice of law within their Wills.
The UK is treated for the purposes of the Regulation as a “third state” in the same way as non EU states, meaning that post Brexit the application of Brussels IV to UK nationals will remain the same. The only change following the referendum is that the UK, once it has left the EU, will not in the future be able to opt-in to the Regulation, an option which was left open to it as an EU member state. The reality is that the UK was unlikely ever to have opted in given that its principal concern, uncertainties created by “claw back” provisions for lifetime gifts, remains present (claw back arises when a person benefiting from a forced inheritance is able to make a claim for that inheritance from the lifetime gifts made by the deceased)..
Owning property in the EU
Whilst the inheritance law position for UK citizens with assets in the EU will remain the same post Brexit in terms of the validity of Wills and the application Brussels IV, consideration will need to be given to the ability of UK citizens to own property in the EU and to use it, whether as a holiday home or a permanent home.
It is worth noting that most major European countries do not have any restrictions against non EU citizens purchasing land or real estate. However, there are certain visa requirements in place for non EU citizens wishing to holiday, live or work within EU countries. We do not know at this stage whether there will be a general agreement with the EU in relation to the movement of people and labour, or whether the UK will need to negotiate individual agreements with each EU state. Only time will tell what the results of the UK’s negotiations will be and so those with assets in the EU should keep a watching brief on developments.
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