Does Brexit mean I must make new will choosing English law?
John Kitching, a director of French Law Consultancy Limited, answers a reader query on Brexit and wills.
Can I still use my existing will choosing English law after Brexit? Do I need a new will?
Brexit does not hinder your ability to choose the law of your nationality under article 22 of the EU Succession Regulation 650.2012 (“the EU Regulation”). If you have elected for the law of your nationality in your wills, France will apply your national law under the EU regulation. This means the will’s terms will be carried out irrespective of any French reserved heir rules.
If there is no express election of the law of nationality, there might be an implied election of English law. This is due to the transitional provisions of article 83 (4) of the EU Succession Regulation. These provisions of estates where the testator had not changed their will since the EU Regulation came into force on August 17, 2015, but it can be shown from the will that they intended to choose their national law, had they been able to do so.
However, for wills made after August 17, 2015, there needs to be an express election of English law. A major warning – while you can elect English law, you cannot elect UK inheritance tax legislation, French inheritance tax still applies, so tread carefully. Spouses are exempt from inheritance tax in France. Children benefit from €100,000 tax free from each parent they directly inherit from.
Unmarried partners, step children and friends are taxed at 60%. Also do bear in mind that there are French mechanisms which may achieve your wishes without the need of the election of the law of your nationality.
A major change due to Brexit relates to UK charities. Unless the UK and France agree a specific change in inheritance tax treatment, 60% inheritance tax will apply for legacies to UK charities from a French resident deceased, or from a British resident leaving a French immovable asset. Brexit does not change the validity of your wills nor does it improve the French inheritance tax position. But, for legacies to UK charities, Brexit makes things much worse.
Now might be a good time to review your wills and make sure that there is a valid election of law as desired and to check that the will is drafted so as to avoid common inheritance tax mistakes (such as use of Discretionary Trusts, appointments of unrelated trustees).
Call +44 (0) 16 63 74 54 88 for an initial free consultancy.
Find more of your Brexit questions answered in our helpguide: Brexit and Briton in France
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