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What does Brexit mean for my will?
Let’s talk about Brexit. I, for one, did not think I would be happy to talk about ‘Brexit’ for a long time, but then came a global pandemic. Coronavirus (the big ‘C’ word) does not seem to be going away anytime soon, but it wasn’t too long ago that we were all talking about the ‘B’ word.
During these unprecedented times, planning and thinking ahead has become even more important. It turns out the world cannot completely come to a halt, and soon it will be 1 January 2021, the end of the transition period for Brexit. What the pandemic has taught us all, is that it is crucial to ensure that our affairs are in order because you never know what could happen.
In our experience, many of our clients do not realise that they should make a will in each country where they own assets. A common misconception is that you should produce a global will to cover all of your worldwide assets.
What your will covers if you live in the UK
If you live in the UK, then British succession rules specify your will can cover your worldwide movable assets (essentially everything apart from real estate) and your British estate.
However, this is not the case in every country due to the Brussels IV Regulation (EU Regulation 650/2012 to be precise!). The aim of the Brussels Regulation was to harmonise the application of succession laws across the EU Member States e.g. which country’s law applies, who inherits the assets, and who administers the estate.
The UK never signed up to the Brussels IV regulation and so, it is treated as though it is a third-party State. Even though the UK has not adopted Brussels IV, it has meant that UK individuals who own assets in other EU member states are able to include a choice of English law clause in their wills.
Nonetheless, it is important for UK individuals who own property in the EU to make sure that they have made a will in the country where the asset is located, as well as an English will, which was always the case prior to Brussels IV.
You have a UK will but live abroad?
If you made a will in the UK and now live abroad, remember that inheritance tax will only be payable on your UK assets. Your executors might be able to reclaim tax through a double taxation treaty if inheritance tax is charged on the same assets by the UK and the country where you lived.
What happens to my will when Brexit happens?
The short answer is not a lot. Because the UK did not sign up to the regulation, the position will not change on 1 January 2021 when we leave the EU. However, if you have immovable assets such as a property, investments, or a business, you must take advice in the appropriate country. Most importantly, remember not to revoke your will in the UK.
Making a will, pre- or post-Brexit, with the right advice from our Wills, Trusts and Probate team will ensure that your will is legal and tax efficient.
Don’t let the social, financial and political turmoil stemming from Brexit, and now a global pandemic, prevent you from putting a will in place.