10 August 2012 by

EU rules to ease cross border successions, Brussels IV

There are a growing number of people in the UK with assets abroad and whether it’s a holiday cottage in France or a villa in Greece the logistics of cross border tax planning can be tricky; similarly dealing with the foreign assets on death can be equally problematic for the Personal Representatives of the estate.

On 7th June 2012, the European Council adopted new rules to ease cross-border successions, the enticingly named ‘Brussels IV legislation.’ But don’t get too excited as the UK has not yet opted in to the legislation.

The aims of the new rules are to reduce legal headaches when someone dies with property in an EU country and to make it easier for European citizens to handle the legal side of an international Will or succession.

The new law makes it considerably simpler to settle international successions by providing a single criterion for determining both the jurisdiction and the law applicable in cross-border cases, the deceased’s ‘habitual place of residence’ as at the date of death, unless the deceased made an election otherwise.

The law also provides for a European Certificate of Succession which will allow beneficiaries to prove that they are heirs or administrators of a succession without further formalities throughout the EU and allow Personal Representatives the authority to act across borders.

Brussels IV is expected to become effective in August 2015 and will then be binding on all 27 EU member states except for Denmark and (unless they now decide to opt in) the UK and Ireland.

There have been a number of problems for the UK in deciding whether to opt in to Brussels IV which include the definition of ‘habitual residence’ and the lack of clarity on the role of Personal Representatives. Significantly, a main concern is in relation to the claw-back of lifetime gifts; other member states require lifetime gifts, even if to trusts or charities, to be brought back into the calculation when establishing entitlement to an estate.

At the present time the UK Government has not stated whether it will consider, or consult, on Brussels IV although it does have the opportunity of opting in to Brussels IV in the future.

If you have any questions aboutwealth and estate planning, in particular relating to overseas assets, please contact Jane Molyneaux on 020 7288 4771 or email janemolyneaux@boltburdon.co.uk

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