Q&A - Would there be inheritance issues if we left our UK home to our son and our overseas home to our daughter?

29/09/2014

Q: My wife and I are thinking of buying a holiday home in Sardinia. If we go ahead with our plans we would like to leave that house to our daughter in our will and leave our UK home to our son. Would there be any problem with that, or is there anything in foreign legislation that could prevent it?

A: Legislation covering the disposal of property differs from country to country and here in the UK the law states that foreign property, including both land and buildings, comes under the jurisdiction of the country in which the property is situated. Therefore you may not necessarily be able to specify disposal terms of an overseas property in your UK Will. The way around this is to make two wills – one in the UK and one in the country in which the property is situated. It is essential however that the two wills are consistent with and do not revoke one another

In some countries, there are also ‘forced heirship’ rules to consider. These state that a proportion of your property must, by law, pass to specified heirs, often limited to direct bloodline relatives. This could cause problems if for example your wife died and one of your preferred heirs was say her brother. Heirship rules would apply irrespective of what your wishes were, or what is stated in your Will.

Finally, you need to be aware of the inheritance tax rules of the country in which the property is situated. Land and buildings are likely to be liable for local inheritance taxation on disposal and they can also be very high, particularly where beneficiaries are not family members. You would also need to obtain a valuation of the property for the purposes of probate. You really do need to take proper legal advice before purchasing a property as this is quite a complex area of law.

Victoria Wilson

Victoria Wilson

Partner

A Partner and Part of our Probate, Wills, Trusts and Tax team in Oswestry