Most of our clients do not live within close proximity to our offices, but whether our clients can come into our offices to meet us, or whether we instead take instructions using telephone, email, the post and Skype, we can advise those with assets in the UK and abroad, on how to:
International and Cross-Border Estate Planning and Wills
- Furnished holiday lets
Labour plans to stop these being treated as business income in 2010 were shelved, and the relief will extend to properties in the EU from 6 April. However, days let will have to increase to 105 from the current limit of 70. Final details awaited but you may need to boost your marketing effort as competition for lettings increases.
The European Commission announced its intention to tackle this problem within the EU on 1st March 2012. There are said to be over 12 million Europeans living outside their own country and around 450,000 international successions each year.
This link takes you to EU guidance – in 22 languages if that makes it easier for you!
This may well simplify probates for families within the EU but does not address the problem which exists across borders outside the EU.
The previous article touches on inheritance rules in countries outside the UK where identifying ‘next of kin’ is in some ways more important than in England. Writing Wills is much less common in Europe than in the UK as local ‘forced heirship’ laws identify who is entitled to inherit local assets, particularly houses, and who is liable to pay death duties.
We have mentioned changes to French taxes which may affect UK resident owners of holiday homes in France in previous editions. They introduced social taxes on rental income, and extended capital gains to non-resident individuals, coming into force on 18th August. Deadlines approach on 30th September, 15th November and 31st December.
The new deadline on 15th November is for payment by non-French tax residents of the “exceptional” Wealth Tax introduced on assets held on 1 January 2012, for those already liable to pay that tax.
Bernard Matthews of bootiful turkey fame came back into the headlines recently from beyond the grave as his heirs disputed his £40million fortune. He had tried to persuade his three adopted children by an early marriage, and his natural son by an informal relationship, to allow his French mistress of 20 years standing to be sole beneficiary of his €15million villa in France and £1million more besides.
- Inheritance Tax Planning – Offshore Factors
These notes assume you have read our leaflet Basic Inheritance Tax Planning and/or the Quickpoints Inheritance Tax - Introduction on our website. The issues addressed here in more detail concern assets a UK person may own outside the UK, and the consequences of non-UK people owning assets in the UK.
France - UK owners of property in France who use it as a holiday home rather than their permanent residence, and in particular if they rent it out, should know that the French Tax Bill which introduced social taxes for rental income, and capital gains to non-resident individuals came into force on 18th August 2012. The succession tax allowances for individuals (eg spouse and children) inheriting French property also reduced.
On 18 June a Consultation Paper was published on this topic. The intention is to limit to £3600pa the premiums for new ‘qualifying policies’ taken out from 6 April 2013 by any individual, if the maturity proceeds are to qualify for tax free status. The tax relief may also not apply if the beneficial owner of a policy is not an individual – eg it has been placed in a Trust from which the settlor has been excluded as a beneficiary.