McHale & Co. Solicitors Blog

New EU Inheritance Law may leave your Will in need of a Review

If at present you are a UK resident who has assets in other EU countries, you may well be unwittingly leaving these overseas assets subject to English law, this comes following new rules on cross-border inheritance in the European Union which recently came into effect.

The new rules aim to make inheritance easier across the EU by allowing individuals the chance to chose either for the law of their nationality or their last habitual residence to be applicable to their inheritance for assets across Europe.

If an individual does not clarify which state law they wish to adopt the default position will be the law of the country where someone is a habitual resident at the date of death, this will govern succession to their entire estate.

It is important to note that the UK government has opted out of these new rules, but the changes may still have an impact on UK citizens who have properties or other assets in another EU state.

The new rules have the effect of allowing people to opt out of the forced heirship rules that currently apply in several EU countries, which many people believe to be draconian.  Further problems can be experienced such as dealing with an estate in a country where they do not have experience in dealing with executors. The rules would now allow a person to govern how assets are to be passed on within a family after death.

Those who do not want English law to apply to assets which are held overseas in another EU country which has opted into the new rules may wish to consider amending their current existing wills to make sure that this point is made clear.

Another thing to consider is that Chancellor George Osborne announced in July that he will raise the inheritance tax (IHT) threshold from £325,000 per person to £500,000.

If you own a property worth up to £1m you will be able to leave it to children or grandchildren completely free of inheritance tax from April 2020.

Anyone who wants to downsize to a smaller property will be eligible for an “inheritance tax credit” so that even if they sell an expensive property they will still qualify for the new threshold providing the bulk of the estate is left to direct descendants. This is an attempt to encourage pensioners to free up larger properties for growing families.

If you would like to make amendments to your will in relation to these recent changes, or simply to obtain further information, please contact our specialist team on 0161 928 3848.

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