Many people dream of owning a home in the sun and as property abroad is often much cheaper than the UK it is achievable.
We would always recommend that you get specialist professional help in the country where you buy the property to make sure your investment is safe.
But do not forget to consider what happens if you own a property abroad when you die. The situation is very complex and may even depend on where the property is located. But here are a few pointers:
Having no Will at all is to be avoided - a recent case where a British National who died intestate in Spain saw his property pass to his estranged children from his first marriage and not his 2nd wife, with whom he was living at the time of his death
Remember Scotland is also a foreign country and has different laws to England and Wales
Europe works with the concept of "habitual residence". They consider that your estate should pass in accordance with the laws of the country where you are resident. If it is unclear it would be the country with which you are most closely associated. It will usually be beneficial to include in your Will a statement that you regard yourself as English and wish your estate to be dealt with under the law of England and Wales. If you have purchased the home abroad after you made your English Will it is worthwhile to add this to the Will.
Many European nations do not have Trusts. Our Wills always use a trust as the Executors are effectively acting as Trustees whilst they are dealing with the estate. This could result in adverse tax consequences. One option might be to have 2 Wills, one very simple one leaving the foreign house to named beneficiaries and the other, a normal one under English law for all other assets.
Jointly owned property may pass under the laws of the country where the property is located but that will depend on how you own it. So you will need to understand the effect of any choice you made under local laws.
Local foreign lawyers will need to be involved as well as UK lawyers to deal with the transfer of the house abroad. As different countries are interpreting the legislation differently it may be many years before we know how best to advise owners of homes abroad. Effectively we may have to wait and see what happens when owners die and how that country tackles the problem.
In most cases it will still probably be best to have 2 Wills. Both need to say you want English law to apply. One you will prepare in England for all assets except those in the country where the holiday home is located and one for the assets in the country where the holiday home is.
Make sure when you do the second Will it states clearly the other Will is not revoked.
If you would like any additional information regarding this article please contact Jean Newton, Partner and Head of Private Client on 01905 721600.