Richard Frimston

CROSS BORDER SUCCESSION, WILLS AND TAX IN EUROPE

BRUSSELS IV & OTHER RECENT DEVELOPMENTS

February 2011

What do we mean by Cross Border?

Foreign assets a Foreign Will Foreign connections

Domicile Residence Nationality

of self or family member

Connecting factors

DomicileHabitual ResidenceNationality; and, in some casesReligion Situs

What do we mean by Cross Border?

Foreign assets a Foreign Will Foreign connections

Domicile Residence Nationality

of self or family member

Matrimonial Property Regimes

• Primary

• Secondary

• Community

• Separation

• Legal Regime

Private International Law Tools

Jurisdiction

Applicable Law

Recognition and Enforcement

Matrimonial Property Regimes & Private International Law

• France, Luxembourg, Netherlands - Hague Convention XXV of 14/3/1978

• England & Wales – Radmacher v Granatino

• Scotland• USA• EU – Rome IV

Mismatches of Connecting Factors for Taxation

• UK– UK Assets passing– Worldwide Assets going from:

• UK dom• UK deemed dom

• France– French Assets passing– Worldwide Assets going:

• from French resident• to French resident (sometimes)

• Spain – Spanish Assets passing– Worldwide Assets going

• to a Spanish resident• Netherlands

– Dutch Assets passing– Worldwide Assets going

• from Dutch resident (within 10 years)• Germany

– German Assets passing– Worldwide Assets going

• from German resident (within 5 years)• to German resident (within 5 years)

Double Tax Relief• UK / India

– overrides deemed domicile rules– no IHT in India– UK cannot tax non UK assets

• French Assets passing between UK doms e.g. usufruct from A to mixed sex PACS partner B

– on death of A • 40% UK IHT• no French tax - exempt

– on death of B• 40% UK IHT• no French succession tax – not taxable

– DTR of no assistance

Cross Border Estate Planning

Formal validity of WillsSuccession law (Administration)Taxation

Planning Points

• Reduce number of Jurisdictions• Review domicile, residence and nationality

with a view to possible changes• Review Wills for:

– Forced Heirship issues– Inheritance taxes in all jurisdictions

• Overriding Trusts?• Joint Property• Matrimonial Regime Change

European Union

• Treaties

• Regulations

• Directives

Brussels IV • EU Succession Regulation 2013?• Hague Conventions XXI (Administration)

and XXXII (Succession)?• Habitual Residence not Domicile?• Choice of Nationality (or HR?) at time of

choice?• Unitarian not schismatic and no Renvoi?• Last HR is forum?• Enforceable Succession Agreements

Brussels IV

• use choice of law provisions and succession agreements

• nationality and common law domicile still connecting factors for other purposes

• personal status– marriage

– parent child

• tax

• double tax treaties

Richard Frimston

CROSS BORDER SUCCESSION, WILLS AND TAX IN EUROPE

BRUSSELS IV & OTHER RECENT DEVELOPMENTS

February 2011