Living abroad is becoming a popular option among British retirees. With the cost of living in the UK increasing, the opportunity to exchange rainy days for Sea and sand is an attractive one. Making your money stretch further with lower property prices, cheap goods and all year sunshine, it’s easy to see why many Brits are making the move. However with the excitement of a more leisurely life style it’s easy to forget things like updating your will or writing a will to include dealing with foreign assets.
Property or assets are subject to the laws of the country in which they are held and provisions need to be made to ensure your estate passes to your chosen beneficiaries. Unfortunately a very close friend of mine has found herself subject to this difference in Laws. My friend with her husband owned a property in Cyprus. Sadly her husband has recently passed away. We have started to administer the Estate and have been informed that Cypriot Law states that 50% of the property, jointly owned by her and her husband, will pass not to her as the surviving owner and spouse but to her step son. This differs to UK law where a property in joint names passes to the surviving owner.
There are so many possible problems she could encounter in Cyprus when dealing with these assets. Hopefully she can come to an agreement with her stepson which means she can stay in the property for the rest of her life. If she chooses to sell, 50% will go to her stepson upon sale.
It is crucial to remember that a will made in the UK may not be valid abroad. This will depend on the terms and complexity of the will. For straight forward cases, the UK will is likely to be accepted. In some more complicated situations where minor beneficiaries or trusts are present, you may need to make a will in the country of residence. This will simplify the process and make it cheaper, but be aware that a new will made abroad may revoke your previous UK will.
You should also remember that moving abroad does not discharge any tax liability on property overseas under the UK law, unless you change your domicile of origin. Despite popular belief, changing residence does not automatically make you a “non-UK domiciled”. The result of this can be double taxation, which may leave you or your loved ones at a serious disadvantage, having to pay both domestic and foreign taxes on inheritance.
It is highly advisable that you take professional advice before moving abroad and seek advice from a solicitor in the country you plan to move to. In the long run, this will save you and your family from great stress and considerable financial losses.