New European rules on inheritance British
citizens with property abroad should take advantage of
The European Union Succession Regulation
No 650/2012 (Brussels IV)
Are you one of many UK people living in France? Do you have
properties in more than one Member State of the European Union? Would you like to apply
UK inheritance law on all your assets in your Will? The new European regulation opens
for the first time the possibility to choose the law to be applied to your entire
estate. Even though UK opted out, the new regulation will be very important for British
citizens holding assets outside of the UK since almost all EU Member States will apply
it. As we move closer to its full implementation on August 17th 2015, here are some
facts you should be aware of:
The new regulation moves towards a system where the law of
one jurisdiction applies to an entire property, even where the deceased held assets in
several EU countries.
UK, Ireland and Denmark have opted out of the regulation,
so it is not applicable in these Member States, however their citizens can still take
advantage of the new provisions if they reside and/or have assets in any of the other
The main rule states that in case of no election, the law
which will apply to the entire estate shall primarily be determined by the habitual
residence at the time of death or, secondly, by where the deceased was manifestly most
closely connected to.
The most important provision allows now a person to choose
by express declaration in their Will which law applies to their entire property, but the
choice is restricted to either where they habitually reside or their nationality.
It is important to remember that the regulation does not
cover taxation of estates but it could impact on tax planning.
Importance in the Franco-British context
According to French law, if you are resident in France,
French law will apply to all your worldwide assets. If you are not French resident, it
will only apply to your assets held in France.
The most relevant but not only difference between
succession laws in France and UK is the specific protection of children of the deceased
under French law. According to the provisions of the Code Civil, children can not be
disinherited, which significantly limits the free disposal of your property. Depending
on the number of children, you will not be able to dispose freely of ½ up to ¾ of your
estate. Since in UK no such limitation is known, because under British law a person may
make a Will leaving his/her estate to any chosen beneficiaries, the new regulation makes
it possible to regain the full freedom of disposal. This can be useful not only if you
consider disinheriting your children, but simply when you wish to shape the shares of
the inheritance according to your personal plan and the structure of your
UK citizens can therefore choose the British law as law
governing their French assets on the grounds of art. 22 paragraph 1 of the regulation
based on their nationality. In that case a French notary has to apply UK law to a Will
prepared in France dealing with French (and other) assets. Again, it does not matter
that UK opted out, it is only relevant that France applies the regulation in question.
The Will has to specify which law should be applicable and on which grounds the choice
of law has been made (here: UK nationality, art 22 I. of the regulation.)
A choice of law in a Will made before the entry into force
of the regulation on August 16th 2012 would be invalid.
However, a Will prepared between the entry into force of
the regulation and its implementation on August 17th 2015 will be legally effective
regarding the chosen law only if the testator dies after August 17th 2015. After this
date, the new European rules will apply to all successions within the EU Member States
except UK, Ireland and Denmark.
Legal issues and practical challenges
Readers knowing UK inheritance rules may have noticed that
British law traditionally only applies to assets situated in UK. In case of immovable
property, applicable law is the law of the country, where the property is located. This
means that the law to be chosen basically sends the case back to the EU Member State,
here France. Fortunately, this mechanism known as renvoi is blocked by the regulation
itself, which states in art 34 par. 2 that “No renvoi shall apply with respect to the
laws referred to in Article 21(2), Article 22, Article 27, point (b) of Article 28 and
A practical challenge could be to find a French notary
ready to execute a will applying UK law, but it is in fact more of an obligation of
notaries, to adapt to changing laws. The regulation has been adopted two years ago and
is not only relevant in the Franco-British context, since it opens the possibility to
apply any succession law of any state of the globe, not only one of a EU Member State.
Solicitors experienced in representing British clients, like myself, usually have a
network of English speaking notaries they work with on international cases.
Therefore, there is no doubt about the need to consider the
options opened by the new EU law while preparing or changing a Will. Therefore, it is
recommended to consult a French solicitor or notary already before August 2015 in order
to assure the profits of the new legal possibilities. Please note, that the first
consultation with a French lawyer is usually free. For more details do not hesitate to
contact my office by phone or email.