French property – UK will?
This information has been prepared by Sykes Anderson Perry Limited as a general guide only and does not constitute advice on any specific matter. We strongly recommend that you seek professional advice before taking action. No liability can be accepted by us for any action taken or not taken as a result of any information or advice given or omitted.
There has been comment in the expat press about English law applying to your French property when you die. Most people are not aware of the subtleties and complexities of the EU Succession Regulation. There are a few key points to consider when making decisions about your will under the EU Succession Regulation which came into effect on 17 August 2015.
- The overriding principle under the Regulation is unity. The principle that only one law will apply to your worldwide estate. This will be interpreted differently in the UK as the UK opted out of the Regulation, but in France (and the other EU countries which signed up to the Regulation) this principle may override your will.
- An existing will (or wills) may be construed differently from what you would expect. The Regulation has specific provisions dealing with wills put in place before 17 August 2015.
- The rules on which law applies to French land may be different depending on whether you apply English law on the basis of your residence or your nationality.
- The law you choose to apply to your estate must be the law applied to the administration of your estate. This means that if you apply English law to your French property, you will be asking the French courts to apply English probate law. This may complicate the administration of your estate.
- Whilst you can choose the law which applies to your estate, the Regulation does not cover taxation. This means that whilst you can avoid French reserved heirship provisions, your beneficiary could be subject to French inheritance tax at 60%.
So how to take advantage of the EU Succession Regulation?
Disregard any information about the position prior to 17 August 2015. The position from that date has changed fundamentally. It is best to take expert advice from somebody specialising in the Regulation as to what options are available to you. These will be very much personal to you and involve consideration of your nationality (or nationalities – even if a passport is not owned), your habitual residence, your domicile, your family make up and how you would like to leave your assets. Review existing wills and take tax advice in the different jurisdictions where you hold assets. This is where advisors with cross border experience can help you to compare different scenarios.
We are beginning to administer estates under the EU Succession Regulation. These are not as straightforward as the deceased had hoped when:
- The choice of law clause is not sufficient (a key issue here is that we have British nationality but three legal systems within the United Kingdom).
- The tax consequences are very unclear and likely to be punitive.
- Someone has been appointed as an English style executor, but who was then advised by a French lawyer who has no concept of the principle of intermeddling. If following the notaire’s advice amounts to intermeddling the person can no longer renounce the executorship, potentially making them personally liable for all the deceased’s debts.
The message is, take advice from someone with expertise in this area. Prepare to review your will again in a few years when more will be known about how the EU Succession Regulation is being interpreted in France and how French courts and notaires are managing estates subject to English law. It is also best for your executor to know they are being appointed and to be given advice, in advance so that they can renounce if they so choose.
Solicitor and diplômée notaire