New European regulations will give expats the right to decide who should inherit their assets, such as property or investments.
For the first time, foreign residents in EU countries will not have to be bound by the succession rules of their country of residence.
New regulations will be introduced on 17 August by the European Commission to permit individuals in EU member countries to choose whether to apply local succession rules or those of their country of nationality in leaving their foreign assets.
While UK provision means that individuals can chose the people who will inherit their property and other assets, most other countries, including Portugal, have strict succession laws most often benefitting a spouse and offspring.
The European Succession Regulation, known as Brussels IV, aims to simplify cross-border EU succession. It will allow individuals to choose the law governing the succession of their EU assets on death.
It will not affect inheritance tax, which is normally determined by residency and the location of the assets. When multiple locations are involved, double tax treaties usually determine what inheritance tax is payable and where.
All the EU countries have adopted the changes, with the notable exceptions of the UK, Ireland and Denmark. But any Brit with assets in any country other than these three will benefit.
It will be imperative for the individual to draw up a valid will to indicate their decisions for heirs and to elect which country’s law is to be applied. It appears that without such a document, the local law will apply.
Proper legal advice should be sought.
The European Commission said that around 450,000 cross-border successions occur in the EU every year, estimated to be worth more than €120 billion.
