Alvaro Aznar Azcarate and Léa Maynard explain what you need to consider when dealing with cross-border estates 

Álvaro Aznar Azcárate


The number of estates with an international asset is on the rise. There is not only an increase in the number of foreign assets, but also the estates of foreign nationals in England and Wales, and an increasing number of ‘international’ families, moving countries throughout their lives. The purpose of this article is to assist practitioners when dealing with an estate or estate planning with an international element.  

Applicable law in cross-border estates  

The private international law / conflicts of law in the UK state that moveable property will be dealt with under the law of the domicile of the deceased, and the immoveable property under the law of the place where the property is situated. While this is what the UK states from an international private law point of view, it will not necessarily be accepted in the jurisdictions involved in the succession of the deceased. For example, if the deceased is an English domiciled person who has property in Spain, it does not automatically follow that Spain will agree that Spanish law applies to the property.  

When dealing with assets in continental Europe, it is important that you consider the interaction that Regulation EU 650/2012 (EUSR) (on jurisdiction, applicable law, recognition and enforcement of decisions and so on) will have on the succession of the deceased. It can have an impact not only on the assets situated in a regulation member state but it could potentially apply to assets in other jurisdictions.

Tip: do not rely on the UK private international law conflict rules as these may not apply with the overseas assets.

Domicile, habitual residence and nationality 

These three concepts can play a key role in different jurisdictions. 

Domicile plays a key role in succession in England and Wales; it determines how moveable property devolves, and whether the entire estate is taxable in the UK. However, the concept of domicile has no equivalent in many civil law systems.  

Habitual residence plays a key role in the succession in the EUSR member states. Habitual residence should be understood generally as the centre of vital interests of an individual. Contrary to domicile, it requires physical presence, though the reasons underpinning such presence will also be taken into consideration (for example, if the sole reason for physical presence in a country is work purposes, the individual may be found habitually resident in another country).  

Habitual residence can also have tax consequences, as in many jurisdictions the fact that a person resides for a certain period of time in one place can make them tax resident in that jurisdiction, which can have an impact on inheritance tax (IHT). The rules are grey and never as clear cut as ‘this many days in one year makes you a resident in that country’. For example, in France a person could be found resident for tax purposes even if they only spend a couple of months a year in the country, if it is the country they spend the most time in, or where their spouse and children live full time. Proving habitual residence in a particular country can be tricky. 

Nationality, in some jurisdictions, could be a connecting factor in terms of applicable law (or have tax repercussions). Especially when a member state of the EUSR is involved, nationality becomes a key factor as the regulation allows a person to opt for the law of their nationality (irrespective of domicile or habitual residence) to apply to their worldwide estate, including implicitly.

Using trusts in civil law jurisdictions 

Trusts are frequently used in common law systems, mainly for preservation purposes. However, in many civil law countries, trusts are not recognised or rarely used, or in worst-case scenarios such as with France, will trigger a set of onerous reporting obligations, a punitive tax regime, and cause issues in administering an estate. If dealing with an estate where assets are left on trust, seek advice from a legal practitioner in that jurisdiction as soon as possible to ascertain potential alternatives. Do not assume that the authorities in the other jurisdiction will accept the trust, or that the trust will not have consequences in jurisdictions where they do not exist in the national law.  

Beneficiary versus personal representatives 

In most common law countries, the beneficiary plays a minor role as opposed to the personal representative, who has vast powers in the administration of an estate. In many civil law countries however, personal representatives do not really exist (or, if they do, they have very limited powers), and the administration of the estate is led by the beneficiaries who play a key role. This can complicate things with estates that have multiple residuary beneficiaries, warring siblings, or a beneficiary delaying the process, and would need to be carefully managed.  

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If dealing with an estate with foreign assets, check with a practitioner with expertise in the other jurisdiction how the estate will be dealt with there. 

It could be that the asset will have to be transferred to the beneficiary and the personal representative will have to ratify this or be entirely cut out of the process while still retaining liability, for example to ensure that the relevant IHT obligations are fulfilled. In certain civil law jurisdictions, transferring the asset to the personal representative can create a large tax liability.  


In UK estates, it is the estate that is liable for IHT, whereas in many continental systems it is the beneficiary who is liable to pay the tax and, instead of a general nil-rate band allowance, there can be allowances for each beneficiary.  

Another common aspect in continental systems is that the above IHT allowances and rates may depend on the relationship between the deceased and the beneficiary. Close relatives may have higher allowances compared with remote relatives or unrelated parties. There is also the fact that, while transfers between spouses can be tax efficient in other countries, there may not always be a full IHT exemption.  

Is there a double tax treaty? How are the foreign assets taxed? 

The UK has a handful of double tax treaties for IHT purposes. In many cases, it may be possible in the UK to claim unilateral tax relief on the taxes paid in the UK for the foreign assets (if taxes have been paid there as well). However, this can be complex, especially when in the foreign jurisdiction tax is paid by the beneficiaries on the portion they are inheriting and not the entire estate, as this can lead to time-consuming calculations and a lengthy process in claiming a rebate. Practitioners also need to be mindful that some double tax treaties can have separate ‘deemed domicile’ rules which would take precedence over national law.  

Key point: if you are acting on the planning side, always involve a lawyer in the foreign jurisdiction at the earliest opportunity, as the testator needs to be fully aware of the IHT consequences worldwide, for example when making ‘tax-free’ legacies of foreign assets, to avoid inadvertently placing a very high financial burden on their residuary estate.

Time is of the essence 

Certain countries impose hefty penalties for late filing and payment of taxes. The sooner you instruct an expert in the other jurisdiction the better, especially as for some civil law countries the deadline to deal with the IHT position is dictated by the place the deceased was physically present in at the time of death, irrespective of any other legal concepts. For example, if a UK national, domiciled and habitually resident in England and Wales dies in their holiday home in France, there will only be six months to finalise the French IHT position, as opposed to 12 months if the deceased had died outside of France.  

Use of foreign wills in the UK 

Broadly speaking, a foreign will is valid as long as it is valid in the place executed, or if it meets the requirements of the testator’s nationality or domicile. However, the main issue with the use of foreign wills, in particular continental wills, is the lack of appointment of executors. While the Non-Contentious Probate Rules will determine who will have priority to take the grant, there can be a considerable number of beneficiaries that all can be entitled to take the grant.  

While the general approach is that this is dealt with on a first-come first-served basis (whoever gets the grant first can administer the estate), this can lead to complicated and contentious situations among the beneficiaries. When possible, it is advisable to explain to the beneficiaries what the role of the personal representatives consists of – their responsibilities, their powers – as well as how important it is for a personal representative to be appointed, as the beneficiaries will not be able to act on behalf of the estate until a personal representative is appointed by the probate registry.  

Applying for a grant when the deceased died domiciled abroad  

In many instances, as this will depend on the probate registry or the person dealing with the file, an affidavit of foreign law may be required to either confirm the validity of the deceased’s will or the law applicable and how the estate devolves under the law of the domicile of the deceased. In certain situations, such as intestacy, it certainly helps to submit a copy of the notarial deed or court document of the jurisdiction in which the deceased died, where the beneficiaries are named alongside a translation into English.  

In view of the delays of the probate registry, in instances where the deceased died domiciled overseas, we would recommend that an affidavit of the law of the place of domicile is submitted with the initial application. Do this without waiting for it to be requested by the registrars, to either confirm the validity of the will, who is beneficially entitled to the estate under the law of the domicile, or who is beneficially entitled to the estate in an intestacy – alongside translations into English of the official documents or court orders from the country where the deceased died or was domiciled – as this will always be of use and is often required. 

One will versus multiple wills 

This is the million-dollar question in cross-border estate planning, and there is no right or wrong answer as it will depend on the personal circumstances of the testator. The best approach is to highlight the pros and cons of each option for the client to decide. 

Whether you opt for one worldwide UK will or multiple wills, it will be necessary to have the input of a practitioner in the foreign jurisdiction to advise on the relevant clauses dealing with the foreign assets, or to consider the interaction of the wills before these are executed. But with the introduction of the EUSR, practitioners need to move away from the mindset of advising that a separate will to deal with the assets in a foreign jurisdiction is required . They should encourage their clients towards taking a ‘big picture’ approach, assisting them surround themselves with a team of experts who will work together to achieve the client’s wishes in a holistic manner.