Sarah Sarwar, a senior associate solicitor in our private client team at our Wimbledon office shares her top 5 tips for dealing with cross-border estates.
It is no longer uncommon to have clients who accumulate assets in multiple countries during their lifetime. Accordingly protecting both family and personal wealth requires more care and planning than ever before. As a private client advisor, Sarah has become accustomed to obtaining the necessary detailed background information she needs from a client in order to assess the extent of their international connections.
Here are 5 of her top tips for finding your way through the cross-border minefield:
1. Understand the tax implications
In discussions regarding estate planning, one of the vital considerations should be how your estate will be taxed. If you have assets at home and abroad, you will need to know how these taxes will interact with each other, if at all, and plan accordingly.
2. Know where you live
When dealing with assets in different jurisdictions, it is important to have an understanding of issues relating to your domicile, habitual residence and nationality. These are all separate tests which will impact how your assets will be dealt with.
3. Understand the rules in the jurisdiction in which your assets are situated
It goes without saying that different jurisdictions have different laws. However it is important to understand the implications to your estate. For England and Wales succession law, the most important distinction is the concept of immovable (real estate) and moveable (anything else). Our succession rules allow you to gift your UK immoveable assets to whomever you choose. This is irrespective of your international links.
4. Keep proper records
It is generally well known that making gifts from your estate and surviving 7 years from the date of the said gifts can prove to be a tax efficient way of providing for your loved one. However different jurisdictions have varying accounting requirements. Accordingly it is important to ensure that you keep up to date and accurate records of all gifts made from your estate both in your home country and abroad.
5. Make sure your Will is up to date
Your Will speaks from death. However when you plan it, you only know for sure what your present international links, assets and beneficiaries comprise and what the relevant succession laws specify. Therefore, to have proper peace of mind, you must regularly review your Will and update it when your circumstances change.