Gale force winds battering the UK. The frosty grip of winter descending on the British Isles, albeit the weathermen say we're in for a mild one. If that's the case, you can guarantee there'll still be the wrong kind of leaves/snow/rain etc on the line

It's no wonder that more of us are hankering after a second home abroad (preferably somewhere warm) as an antidote the doom and gloom and a guaranteed winter holiday respite.  In recent years the traditional locations such as France, Italy and Spain have been extended to include countries in Eastern Europe, the West Indies, South East Asia and even as far afield as Australia and New Zealand. 

Property abroad isn't just for the elite. Shared ownership and some of the better timeshare schemes make cottages or apartments more accessible to a broader range of people.  Owning a property abroad can also be a great asset, generating rental income when you're not using it and something that can be enjoyed by generations of your family. 

Maybe just a dream for many of us, but if you can afford it and if expert advice is not sought,  potential pitfalls can await your family and loved ones on your death.  As a rule of thumb we here at Access Legal always advise that you seek legal advice and make a valid Will in the country in which you buy your holiday home. The reasoning behind this is the fact that Inheritance Tax laws vary widely from country to country and some, such as Cyprus and New Zealand, have abolished Inheritance Tax completely. 

However,  it's important to remember that as a UK resident all your assets worldwide are subject to UK Inheritance Tax at 40% over your individual Inheritance Tax allowance (nil rate band), which is presently £325,000.  Married couples or civil partners now have a combined allowance of £650,000 on second death.

Countries such as France still have Forced Heirship as laid down under the old Napoleonic Code although the French Inheritance Act of 2006 has brought some freedom. The majority of countries in Europe are governed by a Civil Code which contains, to a greater or lesser degree, some form of Forced Heirship. 

Countries such as Holland and South Africa have community property rights while in the United States the Federal Laws are augmented by the individual state laws. For example, Louisiana is based on French law whereas New Mexico and Florida are based on Spanish law. Similar variations arise in the states of Australia and the provinces of Canada.

Over our years of experience in this sector we've come across virtually every wriggle and complication you could imagine.  Based on that knowledge, here's a quick review of some of the most common questions we get asked and the answers we provide:

How do I make a Will in another country?

The conveyancing lawyer who acts for your purchase will normally be able to recommend a specialist lawyer. In countries such as France and Spain, specialist English speaking lawyers can be found in most resort areas.  Access Legal from Shoosmiths is also able to suggest lawyers depending on the country involved.

If I do make a Will in another country, what should it cover?

It is very important that your Will relates only to the property and assets owned by you in that country. It should expressly exclude any assets owned by you in the United Kingdom. If not, it could invalidate your UK Will. Likewise your UK Will should relate only to property and assets owned by you in the United Kingdom.

Will I have to pay Inheritance Tax twice?

All your assets are subject to UK Inheritance Tax and your property could be subject to similar tax in any country in which it is situated. To avoid this, the UK has reciprocal tax arrangements with most countries in the world so tax is only paid once. While UK Inheritance Tax is currently 40%, the tax in the country in which you own property may be charged at a higher rate. Your estate would pay the higher rate but credit would be given against the UK tax paid.

If I leave property to my spouse or civil partner there is no Inheritance Tax payable (Spouse Exemption) in the UK. Is this the same abroad?

No, not always. For instance in the United States you would be classed as a "non-resident alien" and the Spouse Exemption would only be US$60,000. Above that amount Estate Tax is levied on non-residents on a sliding scale up to 35%. However, it is important to consult a lawyer in the state in which your property is owned in the US as there are various trust options available which will minimise the Estate Tax, the US equivalent of Inheritance Tax.

In the UK civil partners have the same rights as married couples. Is this the same abroad?

Not always. Although under the law of the United Kingdom civil partners have exactly the same rights in regard to Spouse Exemption in respect of Inheritance Tax, this is not always the same overseas. For example Canada and South Africa will recognise a UK civil partnership but a number of other countries will not. It is always best to seek legal advice in the country in which you wish to buy a property.

If I die will my executors need to apply for Probate abroad?

Yes, although there has been talk for many years of an International Certificate of Heirship, this is still a long way off.  In most countries a separate Probate application is needed. Also note this applies for Jersey, Guernsey and the Isle of Man. In Commonwealth countries a UK Grant of Probate can normally be resealed in that country under the quaintly called "Colonial Probates Act". It is important in the case of Australia and Canada to make sure that the relevant state or province is a signatory to the Act.

What next?

 If you own a property abroad, or are thinking of buying one and need advice about making your Will and what to do next, please call our helpline on 03700 86 86 86 or contact us using our online form

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All documents should be read and used in accordance with the terms and conditions. This document is for your general information only and is not a detailed statement of the law. It is provided to you free of charge and should not be used as a substitute for specific legal advice. If you require specific legal advice please contact our helpline on 03700 86 86 86.