Alison McKay, Partner in our Private Client Services team explains why it is important that people who own property abroad take advice to avoid legal loopholes which could leave their loved ones with international legal row to tackle if a foreign home is not properly protected.
Growing numbers of Brits are understood to be buying abroad - with official ONS figures showing 90,000 purchased properties in Europe last year alone. An estimated 800,000 people from across the United Kingdom are thought to own second homes abroad. But there are concerns that - with those rising numbers - comes a greater risk that families could be dragged into complex international legal battles because inheritance wishes are not made clear in a valid Will.
Our lawyers are experiencing an increasing number of cases where they are working with lawyers in other parts of the world to ensure the correct measures are put in place to ensure there are no questions over ownership following a death.
Alison said: “Some people wrongly assume that their assets - wherever they are in the world - will be covered by the detail of their Scottish Will. It’s an assumption which risks creating a costly headache for their loved ones when they die.
“The last thing they - or you - want is any doubt over who should own your property or ownership going to someone you never intended it to.
“If you have a heritable property abroad - whether as a holiday home or a place where you live because you work overseas - then legal and tax advice should definitely be sought in Scotland and also the country where the property is located.
“It is possible a separate foreign Will might be required and careful attention needs to be made to ensure the wishes of one Will do not cancel out those of another.
“For a number of our clients, we have been working with lawyers abroad to ensure that clients fully understand the implications of owning a second home abroad.”
There are certain countries which have forced heirship rules. These rules can determine what proportion of an estate should be passed to certain heirs and it is therefore important for individuals to fully understand the implications of such rules.
Alison added: “When it comes to dealing with foreign assets on death, the overall position can be complicated if appropriate advice is not obtained in advance.
“The last thing your loved ones will need at what’s already an upsetting and stressful time is a messy cross-border legal battle.”
Lawyers advise that changes in personal circumstances - such as those caused by marriage or divorce - should also be reflected in Wills as soon as possible. Carefully-advised arrangements are also recommended around tax and which inheritance tax rules may apply.
Factfile: Do I need a foreign Will?
Whether you need an additional foreign Will depends on:
● Where you live (your domicile)
● The country where the asset is
● The type of asset it is (movable or heritable)
● The laws of that country itself
An excerpt of this article featured in the Herald magazine on Saturday 23 September 2023.
