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