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“By failing to prepare you are preparing to fail” (B. Franklin)

This is particularly true when you are buying property overseas. Retirement abroad is becoming increasingly popular, and it is amazing how many important matters relating to it are often overlooked. Charmed by lovely properties on the sunny coasts, people are less inclined to think about boring and perhaps upsetting things like inheritance and taxation.

It is crucial to remember that a will made in the UK may not be valid abroad. This will depend on the terms and complexity of the will. For straight forward cases, the UK will is likely to be accepted. In some more complicated situations where minor beneficiaries or trusts are present, you may need to make a will in the country of residence. This will simplify the process and make it cheaper, but be aware that a new will made abroad may revoke your previous UK will.

Naturally, there will be different laws governing inheritance. For example, the freedom of testamentary disposition characteristic for English law does not exist in France, which means that testators can make provisions over a certain percentage of their assets only, whilst the rest will be distributed under compulsory inheritance rules. These statutory entitlements will override the provisions of the will.

If the property is jointly owned in the UK, then on death of one spouse, the surviving one automatically becomes the sole owner, without any tax implications. This is not the case in Spain, where inheriting from a spouse will attract inheritance tax on anything above the tax-free limit, which is not very high at all.

You should also remember that moving abroad does not discharge any tax liability on property overseas under the UK law, unless you change your domicile of origin. Despite popular belief, changing residence does not automatically make you a “non-UK domiciled”. The result of this can be double taxation, which may leave you or your loved ones at a serious disadvantage, having to pay both domestic and foreign taxes on inheritance.

There are several possibilities for dealing with this. You may want to check whether there are any specific treaties with a particular country concerning taxation – these may be useful. Also, certain national schemes may diminish your tax liability. For example, instead of buying property itself, you may be able to buy shares, the transfer of which is tax free. Alternatively, you may refuse your UK domicile by complying with certain requirements and filling in the appropriate form. Bear in mind that this is a lengthy process and it involves cutting any ties with the UK, such as disposing of any property owned here and closing all your bank accounts. Surely, this may not be acceptable if you are leaving your family in the UK.

In any case, it is highly advisable that you take professional advice. A solicitor will be of great help in planning inheritance matters. In the long run, this will save you and your family from great stress and considerable financial losses.

In any case, it is highly advisable that you take professional advice. A solicitor will be of great help in planning inheritance matters. In the long run, this will save you and your family from great stress and considerable financial losses.

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