Owning a holiday home abroad has become increasingly common amongst English people. The idea of purchasing a second property in places like Tuscany, the French Riviera or Spain is undeniably appealing, and also represents, in many cases, a good investment.
There is however, an frequently overlooked problem with a holiday home and is that too many people simply assume that their English wills are a â€˜cover-allâ€™ and that a property abroad will be dealt with under the same terms. This is not correct. The rule is that a property in the UK, a house, a flat or land, will pass in accordance with English law of succession, by will or intestacy, while immovable property anywhere else will follow the law of the country where it is situated.The bottom line is that UK law does not govern immovable assets abroad, and English rules will be difficult to impose in a foreign jurisdiction.
This means that the property may not pass to the chosen heirs, but instead follow local intestacy rules and end up in the hands of very distant relations. This may then give rise to lengthy and expensive proceedings to correct the situation. Also, bearing in mind that not every country recognises Civil Partnerships and common law marriages, local rules could prove very unfavourable in those cases.
The best solution for peace of mind is to have a separate will drafted by a lawyer who understands the local idiosyncrasies and how the rules are applied, thus ensuring that the testatorâ€™s wishes will be understood and carried out in respect to the property.
Many people view writing a foreign will as an extra and unnecessary expense, but the truth is that it is a very good precaution, mainly for two reasons. The first is that in most European countries the estate passes directly to the beneficiaries and not to the executors. This could result in a â€˜double transferâ€™, where the property passes first to the executor and then to the beneficiary, and double inheritance tax charges. The other reason is that if there is no foreign will, the English one will have to be translated and notarised, together with all relevant documents, which may cause great delay in transferring the holiday home, and even lead to penalties for late payment of the taxes due.
Having a separate will to dispose of foreign assets is therefore a logical and quite necessary measure. It could ultimately save a great deal of money and time, not to mention anxiety over the destination of the holiday home.
Giambrone Law is an award-winning Italian law firm with offices in Milan, Rome, Palermo and overseas offices in New York, San Paolo and Casablanca.
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