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Brussels IV looms over EU assets

The succession regulation will affect UK citizens who have assets in any of the signatory nations

16 July 2015

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The European Succession Regulation, or Brussels IV, is one month away from coming into effect and UK citizens are running out of time to regulate their affairs.

Brussels IV will simplify cross-border succession and inheritance rules between European Union nations, by giving individuals the right to specify in their will, which country's law they would like to apply to their EU assets.

The law will take effect on 17 August and will not directly apply to the UK, Ireland and Denmark, who have chosen to opt out the regulation, but there will be some consequences for these nations.

Once Brussels IV comes into effect, the entire estate of a deceased person will be handled by the courts in which they had their habitual residence when they died.

Currently there is a lot of back and forth between EU jurisdictions owing to issues such as where the individual died, their country of birth, the jurisdiction in which they owned property, or where their employer is be based - Brussels IV seeks to eradicate these clashes.

Effects on UK citizens

A UK citizen with assets in any of the signatory nations has the potential to be affected by Brussels IV, depending on their circumstances.

For example if a UK citizen buys property in France, chooses to live there and dies there, then French succession laws (which include forced heirship rules) will apply - this is binding and is a key principle of the succession regulation.

The only way to escape this is to draft a will and declare that UK succession laws should apply to all assets within the Brussels IV nations.

It provides a very good opportunity for individuals to regularise their affairs, but failure to act will have consequences.

Eleanor Metcalf, head of Wedlake Bell's private client group, has added her voice to the growing number of advisers who have welcomed the regulation, and advised individuals to act now.

'At the core of succession planning is preservation of wealth and the introduction of an EU succession law is a major step forward in providing certainty in will writing, for all those with assets in the EU,' she said.

'Individuals should look at what Brussels IV means for them now'.

 

Categorised in:

Tax & Wealth structuring Wills, Trusts & Probate