Expat wills - What you need to know

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Writing a will can be a challenging task, but for UK citizens living abroad, matters may be even more complicated. 

This is because rules and regulations surrounding inheritance and estate planning vary in different countries, meaning that having just one will is unlikely to be enough to cover all of your assets. 

This confusing topic is not always easily explained, and it opens up the floor to a number of rational questions: 

  • Are foreign wills valid in the UK?
  • Do you need separate wills in different countries?
  • Does a UK will cover foreign assets?
  • Can you have two wills in different countries?
  • Do I have to pay tax on inheritance from abroad?

With such matters as complicated as expat wills, it is highly recommended that you seek professional advice from a legal expert. With the help of our experienced advisors at Wills Services, this guide will explain the laws surrounding expat wills.

What is an expat?

Short for expatriate, an expat is somebody who resides in a country other than their native home. This term doesn’t apply to those crossing the border between England, Wales, Scotland or even Northern Ireland, as they all form part of the United Kingdom.

Why expats should make a will

If you live abroad, making a will is just as important as it is if you live in the UK, and without one, your hard-earned assets will be distributed under the laws of intestacy in the country in which you are located.

If you have assets located in 2 or more countries, it is unlikely that the terms of your will you wrote in the UK will be legally binding in another country. For example, any property owned in Brazil cannot be distributed using a UK-written will.

If your will is not deemed appropriate for use in a country in which you own property, land or other assets, it is likely that these assets will be distributed as per the intestacy laws in that country. This could leave your family with an almighty legal mess to clear up during an already difficult period. 

Failing to make a valid last will and testament is a significant risk for a few reasons:

  • Your assets may not end up with who you wanted them to.
  • The probate process could take years, rather than months, to be completed.
  • You may end up paying significantly more tax than necessary.

Issues faced by expats when making a will

When writing a will as a British expat, there are numerous problems that you may come across. Two of the most common (and most serious) issues are:

  • Inheritance tax – IHT rates vary from country to country and, in some cases, you may be charged both in the UK and any other countries in which your assets are situated.
  • Inheritance – Some countries operate with specific laws which, without having a valid will in that country, could clash with any will you have previously written up in the UK.

Inheritance Tax for expats

When residing in the UK, Inheritance Tax is charged on any assets owned worldwide (above the tax-free threshold of £325,000).

UK citizens residing in other countries are only charged IHT on the assets held within the UK, but it is important to note that IHT is also likely to be charged by the authorities in these countries.

As Inheritance Tax rates can vary, we always recommend contacting an expat wills expert to make sure that as much of your estate is passed on as legally possible.

Expats and the law of succession

The law of succession (or succession law) regulates the inheritance of property and can be different across the world.

It is true that some wills are valid worldwide, but there are also wills that are restricted for use in a selection of countries – some are only valid in the country that they were written in.

Inheritance can also be affected by foreign jurisdiction. In some European countries such as Italy, Spain and France (as well as non-European countries like Japan and Saudi Arabia), there are forced heirship laws in place which ensure that a proportion (or sometimes all) of an estate is passed onto ‘protected heirs’, such as children or a spouse.

This law can clash with any will that’s written in the UK, where testators can typically leave an estate to whoever they please as long as it is clearly defined within their will.

Wills, the European Union (EU) and Brexit

While the United Kingdom is still operating under EU legislation, British expats residing in member states of the EU are able to determine whether they’d like their estate distributed under the terms of UK law or those of the country that they are currently residing.

This means that British expats are able to opt for their estate to be managed under UK jurisdiction, which is typically not as strict when it comes to succession and inheritance. 

It is yet to be seen what impact leaving the European Union will have on British citizens living in Europe – however, we recommend that you seek expert guidance when navigating these increasingly murky waters.

Is foreign inheritance taxable in the UK?

If your permanent home (domicile) is outside of the UK, the only Inheritance Tax charged under UK law will be on your assets held within the UK (eg. Property, bank accounts etc.).

You will not qualify to live abroad permanently if:

  • You have lived within the UK for 15 of the last 20 years
  • Your permanent home has been in the UK at any time during the last 3 years

When residing permanently outside of the UK, your foreign assets might be subject to Inheritance Tax as per the rules and regulations assigned by the country you are living in.

Wills for British expats

If you are a British expat seeking advice on how to put together a legally-binding last will and testament, contact our professional legal team here at Wills Services to see how we can help.

Our experienced team and partners are trained to deal with tricky situations such as cross-border inheritance and are on hand to make sure that your loved ones are not left to deal with the complications of acting upon the wishes detailed in your will.

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