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La Dolce Vita

bottega toscanaIt’s a warm summer evening in Tuscany. As you take your passeggiata en route to a local trattoria you glance at an estate agent’s window and you realise that for the price of a two bed flat in Balham you could buy an Italian palazzo complete with pool and olive grove. A few glasses of the local vino da tavola later you start to formulate plans so that instead of an annual week in the sun you could every day enjoy lunch outside on a shaded veranda, and swim under a clear blue sky with the scent of lavender in the air.

For most of us the fantasy above remains just that and come September we reacquaint ourselves with the daily commute and pack the children off to school with shiny new shoes and pencil cases. But for some, what started as a daydream, becomes a reality as they head off for a new life in the sun, or buy a holiday home in which to spend as much time as they can.

If you are one of those taking such a leap it’s important that in your attempt to live the dream you don’t forget to consider the legal implications of what you are doing.

The laws of succession across Europe vary considerably and where individuals have assets in more than one jurisdiction this has historically led to uncertainty about which laws apply.

Under English law for example movable property (such as bank accounts or works of art) is subject to English law, even if situated abroad, while immovable property (such as a holiday cottage) is subject to the law of the country in which it is situated. This can cause unwanted outcomes. French property for example can be subject to the rules of forced heirship so someone hoping to leave their gite to a spouse or cohabitant may find that children’s rights have to be considered. There are ways around this, such as owning en tontine, which is a little like joint owners in England and Wales, however it is important to take expert advice as there can be unwanted outcomes, for example an increased tax bill.

With increasing numbers of individuals owning property in multiple jurisdictions it has been clear for some time that some sort of consistency is required. And now the EU Succession Regulation aims to do just that. From 17 August 2015 EU citizens will be able to elect whether the applicable law on their death will be that of their habitual residence or that of their country of nationality.

The UK, Denmark and Ireland have all opted out of the Succession Regulation. However Britons with property abroad will still be able to take advantage of its provisions. UK citizens living in other European counties (apart from Ireland and Denmark) will be able to elect whether they want local or UK law to apply on death. It seems it will also be possible for those habitually resident in the UK but owning property abroad to make a Will in the country in which they own a property electing for the property to be subject to English (or Scottish or Northern Irish) law.

Whilst the Succession Regulation will only apply to deaths after 17 August 2015 it is possible to include an election in Wills made now about which jurisdiction you want to apply on death after that date and those with properties in more than one country should take advice on this issue when drafting a new Will. This should be a welcome change meaning that the dolce vita doesn’t come with a sting in its tail.

By Angharad Lynn, 22nd October 2014.