EU Property and Forced Heirship Rules | Curtis Parkinson
EU Property and Forced Heirship Rules

EU Property and Forced Heirship Rules

2 April, 2023 3 minutes reading time


In the post-Brexit world, the EU Succession Regulations are still relevant to those who own property in the UK and an EU member state (bound by the Regulation). Many European countries operate (in varying forms) reserved or forced heirship rules. It’s conservatively estimated that over 1.5 million Brits still own property in France or Spain, and many have sought to avoid these laws when considering their potential impact on inheritance.

Forced Heirship Rules

Those of us who live in England and Wales likely find the concept of forced heirship alien. We’re raised to believe in testamentary freedom. In other words, it’s a person’s right to choose who inherits without fear of challenge. Attention must be paid to those eligible for ‘reasonable financial provision’ under the Inheritance (Provision for Family and Dependants) Act 1975.

France

In France, reserved (or forced) heirship has prevailed since Napoleonic times. The regulations were introduced to protect close family members, particularly children, following their parent’s death.

Under French law, an individual’s ‘reserved heirs’ are their children or, if childless, their surviving spouse. If there is only one child, at least half of the estate must pass to that child. If there are two children, then two-thirds (in equal shares)’ However,  if there are three or more children, then three-quarters of the estate must pass to them (equally). When a person dies without any children or other descendants, the surviving spouse becomes the reserved heir and is entitled to share the estate with the deceased’s surviving parents or, if none, to receive the entire estate.

Spain

In Spain, inheritance law mandates that children (and other descendants) automatically inherit at least two-thirds of their parents’ Spanish assets. This rule, known as forced heirship, gives descendants priority over a surviving spouse.

EU Succession Regulation (EU/650/2012)

The EU Succession Regulation (Brussels IV), introduced in 2015, only governs who inherits your estate, not all estate matters. Brits with assets in France or Spain (with strong ties to England or Wales) can choose English or Welsh law to govern their inheritance. This is especially useful for property owners in France or Spain wishing to avoid forced heirship rules.

Addendum to the French Civil Code

A new French law, effective for deaths on or after November 1, 2021, has changed inheritance rules, especially for those with international connections. This law adds a new section to the French Civil Code. It gives new rights to children whose inheritance is impacted by foreign inheritance laws. This means that British citizens with assets in France can no longer assume that English or Welsh inheritance laws will automatically apply. Specifically, if you or one of your children is a French citizen or resident at the time of your death, and your estate is governed by laws that don’t guarantee your children a minimum inheritance, then each of your children is now entitled to a share of your French assets, thanks to this new French regulation.

Our Advice

Undoubtedly, you can take steps to avoid some of the issues created by international inheritance laws. However, what you might think are obvious solutions (such as transferring a property to a child/children) can have unintended consequences. Sometimes, tax liabilities increase.

What is clear is that succession law and tax regimes abroad are very different to the rules that apply here. So, professional advice and planning are essential to ensure your estate goes to the right hands at the right time. If you’d like to discuss this or any aspect of your Will or estate planning, please contact us. We’re here to help.

Please note that all views, comments or opinions expressed are for information only and do not constitute and should not be interpreted as being comprehensive or as giving legal advice. No one should seek to rely or act upon, or refrain from acting upon, the views, comments or opinions expressed herein without first obtaining specialist, professional or independent advice. While every effort has been made to ensure accuracy, Curtis Parkinson cannot be held liable for any errors, omissions or inaccuracies.

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