14th August 2015
New inheritance rules being implemented by the EU will give British families more freedom on how they pass on foreign assets, such as holiday homes.
EU Succession Regulation comes into force on Monday and will give greater freedom as to how assets owned in the EU are passed on in their wills.
The new rules will be particularly important for UK families with holiday homes in the EU or for those with parents and grandparents living in the EU, said Step, the professional body for specialists in family inheritance.
George Hodgson, deputy chief executive of Step, said the rules focus ‘forced heirship’ rules where the law states how assets have to be passed on within a family after death.
‘At present, for example, a UK family with a holiday home in France has very limited options as to how that can be passed on through the family,’ he said. ‘The new regulations change that, and should be a prompt to everyone with EU assets to review their inheritance plans.’
Hodgson said the new rules were complex, and even though the UK has opted out of the Succession Regulation, they will give valuable new rights to those with property or other assets in the EU.
Hodgson gave the example of Clare who is a British citizen resident in England but has a holiday home in France.
Under French forced heirship rules Clare would be obliged to leave her holiday home to her husband and children, with clear rules as to how it would be divided. Instead, Clare would live to leave it to her brother as it was bought with money from their grandparents.
Presently, the law governing who receive the French house on Clare’s death is French law but for death after 17 August 2015 this no longer needs to be the case.
The new rules state that someone can generally choose the law applicable to their inheritance. This can either be the law applying where the deceased had their ‘habitual residence’ at the time of death, or the law of the state of nationality at the time of making the choice, or at the time of death.
As a British citizen Clare can opt to have her French holiday home treated under English law and leave it to her brother.
He said that British owners of EU holiday homes in member states such as France should update their wills and draw up French ones to avoid the country’s forced heirship rules.
‘Given the complexity, however, it would be wise to seek specialist advice as to how to change any inheritance plans,’ he said.