What does EU law say about inheritance rights?

In August 2015 new succession rules known as Brussels IV came into force in the EU with the aim of harmonising succession rules across the EU. EU inheritance rights – residence. nationality or something else? Prior to this, each European country had its own rules governing which law would apply to the succession of a

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In August 2015 new succession rules known as Brussels IV came into force in the EU with the aim of harmonising succession rules across the EU.

EU inheritance rights – residence. nationality or something else?

Prior to this, each European country had its own rules governing which law would apply to the succession of a deceased’s estate. Some countries looked to residence, others to nationality and yet others, including the UK, looked to domicile (and still does). With the growth of European travel due to cheap flights and the increasing number of individuals with holiday homes in continental Europe, the situation after their death can quickly become complex with several jurisdictions involved and overlapping and conflicting rules of inheritance.

The main issue is that many EU countries including France, Spain and Italy are subject to forced heirship rules by which defined categories of relatives are legally entitled to receive a prescribed percentage of the deceased’s estate. These forced heirship rules would previously have meant that an English national with a holiday home in, for instance, Spain would not enjoy the freedom of testation over it that they would have over their English property.

Having said that, it has to be noted that freedom of testation in England is not absolute since the Inheritance (Provision for Family and Dependents) Act 1975 does permit certain categories of individuals connected with the deceased to apply to Court for a share (or larger share) of their estate if “reasonable provision” has not been made.

Habitual residence

With the coming into force of Brussels IV the new default position is that when someone dies the law of the place where they were habitually resident will apply to their assets situated in an EU country. This would of course not assist where an English person has retired to, say, France and lived there for many years before passing away and having become habitually resident there. In those circumstances the default position can, however, be overridden by an election in their Will for the law of the testator’s nationality to apply to their assets instead. Where an individual has dual (or more) nationalities they are permitted to elect whichever one they prefer.

The flexibility introduced by these new rules affects not only who inherits a deceased’s estate but also the potential inheritance tax situation, since on a large estate inheritance tax is likely to be levied on assets passing to any individual other than a spouse or civil partner.

Interestingly, the Brussels IV provisions will apply to anyone with assets in an EU country regardless of whether or not they are themselves an EU national so although the UK (along with Ireland and Denmark) did not subscribe, UK subjects with assets situated in other EU states will still be able to benefit from the new rules, and this situation is likely to remain unaffected by Brexit.

dmaxwell-sbIf you need advice about your estate because you have assets or liabilities outside the UK or are a family relative or beneficiary potentially impacted by a cross jurisdictional probate situation, please get in contact with David Maxwell, who has experience and expertise in this area of probate law.

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