International and Cross-Border Estate Planning and Wills

Property in Spain & Death Duties

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.

France - Tightening the tax screw a few more notches

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.

Talking of turkeys - the risks of inadequate succession planning

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.

Overseas Tax News

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.

Life Insurance - Qualifying Policies

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.


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