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EULawyer
EULawyer, Lawyer
Category: European Law
Satisfied Customers: 242
Experience:  Titular Attorney (Avocat) at Ioan-Luca Vlad Law Office
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We are Belgian nationals domiciled in the UK. We have our

Customer Question

We are Belgian nationals domiciled in the UK. We have our main residence in the UK and are in the process of buying a holiday home in France. We have an English will that states that everything goes to the surviving spouse on first death, on second death the estate will be split by our two boys. We understand that under French law the property in France is subject to forced heirship( which we are comfortable with) and consequently IHT will be payable in France. On first death, our two sons will have reversionary interest ( nue-propriete)on a certain percentage of 50% of the property in France and the surviving spouse the life interest ( usufruit). IHT will have to be paid in France on first death.
Do we also have to pay any IHT in the UK on first death?Are we affected by the EU succession regulation? Do we have to take any action given we are Belgians domiciled in the UK?
JA: Because real estate law varies from place to place, can you tell me what state this is in?
Customer: Not sure what you mean with state
JA: Has anything been filed or reported?
Customer: Nobody died yet
JA: Anything else you want the lawyer to know before I connect you?
Customer: No
Submitted: 11 days ago.
Category: European Law
Expert:  EULawyer replied 8 days ago.

Welcome to JustAnswer!
As your European Law expert, I am reviewing your question and will try to find a good answer for you.

Expert:  EULawyer replied 8 days ago.

Dear Customers,

Thank you for this most interesting question, and congratulations for planning ahead.

Let me answer you from the perspective of a EU-qualified attorney.

The facts are that you are a married couple, with one house in the UK and one (soon) in France, and two children.

Regulation 650/2012, about which I wrote a book, does apply to you for the French property, but not for the UK property, because the UK never opted for it. This results in a situation where each of you has two estates, one containing the UK house, and all your movable property, and the other one containing your French house. Consider it as two buckets, not one, as a person normally would.

The UK bucket is governed by the law of your domicile, i.e. of that part of the UK where you are domiciled (as you know, there are in the UK several systems of law, the most important of which are English (including Wales), Scots law and Northern Irish law). Your Will, being under English law, would be valid there.

The French bucket is governed by the EU Regulation like this: it says that the law of the "last habitual residence" of the deceased applies. In your case, that would be UK / English law. However, this law "sends back" (the rule is called "renvoi", even in English) the issue to French law, because that is where the house is situated; and French law and the Regulation accept this renvoi. In other words, finally, French law applies to the French bucket.

Your English will would be valid according to form in France, because under the Regulation, a Will is valid according to form if it is valid under the laws of the place where it was made, i.e., the UK.

Now, regarding the IHT, I would say that the arrangements you describe would fall under IHT. See in particular this page (https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm27000), items 27211 through 27230. However, this part of the question would be for a UK tax adviser, and not an attorney.

I hope that my answer was helpful and look forward to you rating, which is essential to my activity.

Cordially,

Dr I L Vlad