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By Andrew Gowar

Jun 21st, 2016

Brexit Could Force Foreign Homeowners to Create Two Wills

A Leave vote in this week’s EU referendum could have major inheritance implications for overseas property owners, a Yorkshire lawyer has warned.

Chelsea Martin of York-based Langleys Solicitors said a Leave outcome could force UK citizens to draft two wills in order to prevent their homes in other EU countries falling under local inheritance rules.

"Under English law, issues regarding who inherits immoveable property outside the UK are governed by the law of the country in which the property is located," explained Chelsea.

"This means under English law, if an English person owns a house in France, the question of who will inherit the house is decided under French law, and this may mean that French forced heirship rules apply."

In August 2015, the Brussels IV regulation was formally adopted by the EU. This aims to simplify issues when an individual dies and has assets in more than one EU member state, such as which country’s law applies, who inherits the assets and who administers the estate.

"Although the UK has not adopted Brussels IV, it has meant that UK individuals who own assets in other EU member states can include a choice of English law clause in their wills," said Chelsea.

She uses the example of an English couple who live permanently in Spain but own houses in England and Spain and want English law applied to their estates. "If they do nothing, Spain will apply Spanish law, including forced heirship rules, potentially to both properties. They can avoid this by making wills which include a choice of English law clause. Spain will then apply English law to their estates, including the Spanish house."

If the UK voted to leave the EU, it is not known whether UK individuals would continue to benefit from Brussels IV and whether EU member states would continue to give effect to a choice of English law clause in wills.

Chelsea added: "In that situation, it will be important for UK individuals who own property in the EU to ensure 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."

She concluded: "Much will depend on negotiations and agreements reached between the UK government and the EU in the months and years after the referendum if the UK does vote to leave."

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