Born in Greece and educated in France and Germany before coming to the UK, at his death in April of this year Prince Philip reportedly left a multi-million-pound estate which includes assets overseas. The administration of those assets, and therefore his estate, is likely to take several years to conclude.
Overseas assets add a further level of complication to estate planning and administration. Foreign assets can often go undiscovered until long after an individual’s death and once uncovered they often result in delays and additional costs, including the potential for those assets to be taxed in more than one jurisdiction.
In the UK, Domicile is the first thing to be considered to determine which assets pass according to which jurisdiction’s laws.
As a legal concept, domicile is distinct from nationality and residence. A person who was born in England to English parents may not automatically be domiciled in England and Wales at their death.
An added complication is that the UK has three territories for domicile. Whilst an individual may be UK domiciled for tax purposes, as the UK is not a legal jurisdiction, they will be domiciled in either England and Wales, Scotland, or Northern Ireland for the purpose of governing law.
In addition, Domicile effects the taxation of a deceased’s worldwide estate upon death, as well as the availability of the spouse exemption.
If there is any uncertainty whatsoever about the domicile of the deceased person, you should seek advice on the issue. Evidence may be required to prove domicile and we can help guide you through this process
The administration of overseas assets is dependent on the lifetime planning that an individual has undertaken.
A person can specify within their will whether it should apply to all their assets worldwide, or whether the will should only apply to assets held in the UK or England and Wales. However, even if a will has been made in England which stipulates that it is to apply to all worldwide assets, some jurisdictions will not allow this.
If a jurisdiction fails to recognise the validity of an English will, this can lead to forced heirship which means that the succession laws of that jurisdiction will apply to the assets held there. There is also the issue of any Matrimonial Property Regime that may be applicable to your marriage and how assets are held.
The EU Succession Regulation does avoid forced heirship in some cases, but advice should always be sought as to the specific rules of the jurisdiction where overseas assets are held.
In the case of intestacy (where the deceased did not leave a will) the situation is likely to be even more complicated. Intestacy rules are highly dependent upon the domicile of the deceased individual and not necessarily the location of their assets.
Where assets are held both in England and Wales and overseas, it may be necessary to reseal a grant. Resealing is the process by which an overseas grant becomes valid in England and Wales; however it is only available in certain territories that are subject to the Colonial Acts of 1892 and 1927. The overseas grant, which has already been sealed in the overseas territory is sealed again with the seal of the English Probate Registry, giving the grant the necessary approval it needs to be authorised for use in England and Wales.
It could be that an overseas grant needs to be resealed in England and Wales, or vice versa. To deal with this, you should seek advice from solicitors in all relevant jurisdictions. Our solicitors are experienced in liaising with experts from overseas and can deal with these liaisons on your behalf.
UK inheritance tax may be due on both the English assets and the overseas assets. In addition, equivalent succession taxes could fall due in the foreign jurisdiction(s) where assets are held. Unilateral relief or double taxation treaties may be available to assist, however specialist advice is required and the earlier this is sought, the better.
As an executor (or administrator) it is your responsibility to ensure that all relevant taxes are paid and that they are paid on time. To avoid personal liability, it is advisable to seek expert advice about the tax that is payable in respect of all assets, no matter where in the world these are held.
Preventing unnecessary problems
Seeking advice during your lifetime in respect of your will and inheritance tax liabilities is the best way to ensure that the estate administration process runs as smoothly as possible when the time comes.
Our solicitors can help you ensure that your assets in England and Wales will pass according to your wishes. If you own property or other assets overseas, you may also need to instruct legal experts in the jurisdiction(s) where other assets are held.
When making more than one will, it is important to ensure that all your solicitors are aware of the wishes you are formalising. The best way to do so is to make sure that copies of each will are provided to every solicitor. Dealing with multiple solicitors can prove costly and time consuming, but our team can help make this easier by liaising with your overseas solicitors directly.
How we can help
It is vital that all worldwide assets are dealt with as part of any estate administration. If you are an executor, you should seek professional advice about your duties and obligations. If you are an individual with overseas assets, forward lifetime planning will make the estate administration easier for your executors and also more cost effective in the long-run.
Our solicitors can advise you on the implications of overseas assets and the process for dealing with this. We can also draft the documents for you to ensure that all your wishes are clear and legally binding.
For advice and further information, please contact Associate, Melanie Christodoulou on 01227 763939.