First published online in ThoughtLeaders4 HNW Litigation, Advisory & Divorce Magazine, Issue 23, in July 2026.
Click here to read the full magazine: HNW_Litigation_and_Advisory_Issue_23_Offshore_Edition.pdf
The full article has been reproduced below with kind permission.
Whether by virtue of historic family ties to other countries or as a result of newly-acquired wealth, many people are now fortunate enough to own property in more than one jurisdiction. This can be both a pleasure and a pain. Cross-jurisdictional asset ownership provides scope for confusion in pre death succession and tax planning and also for unintended family inheritance disputes post-death; however, these can be avoided easily with the aid of some joined-up advice.
Getting Your House in Order
Whether by virtue of historic family ties to other countries or as a result of newly-acquired wealth, many people are now fortunate enough to own property in more than one jurisdiction. This can be both a pleasure and a pain. Cross-jurisdictional asset ownership provides scope for confusion in pre death succession and tax planning and also for unintended family inheritance disputes post-death; however, these can be avoided easily with the aid of some joined-up advice.
Getting Your House in Order
Take the example of a long-term UK resident with real property and a bank account in a jurisdiction which is part of the Commonwealth and the inheritance laws of which are based on English Common Law – call it Laputa – and all his other assets in the UK. The individual wishes to leave the Laputan real property to his daughter who is based in Laputa, as his other children and their descendants (all now based in the UK) will have no use for it.
In this situation the individual may wish to execute two Wills: one dealing with his UK assets, and another dealing just with his Laputan assets and appointing executors from the Laputan side of his family. UK executors often find that they must leap several administrative and procedural hurdles before they can deal with assets in other jurisdictions. With particular regard to real property – which may need inspecting, maintaining, and selling – it can be useful to appoint a trusted family member as an executor ‘on the ground’ who can deal more efficiently with third parties in the foreign jurisdiction. If different executors are chosen for different jurisdictions, the person making the Wills should ensure that the individuals appointed are aware of each other’s appointment and that their relationship is cordial enough for them to co-operate rather than obstruct one another when administering separate parts of his estate.
Everything but the Kitchen Sink
Individuals should take care that their Wills are specific – and mutually exclusive – as to which assets are to be administered under which Will. Uncertainty may result after death if the Laputan Will in the scenario above states that it covers all of the individual’s assets in Laputa, but is partly superseded by a later English Will which states that it has effect over the individual’s movable property worldwide, which would include the Laputan bank account and chattels within the Laputan house itself. As in the UK, Laputan grants of probate do not distinguish between immovable (real) property and movable property, so our testator’s Laputan executor has the ability to administer to all of his Laputan assets. After his death, if the Laputan executor distributes the money in the Laputan bank account in the mistaken belief that it is hers to distribute, the beneficiaries under the English Will (if different from those under the Laputan Will) will be put at a disadvantage unless the English executor is able either to recover the absent funds or to make adjustments in favour of the disadvantaged beneficiaries.
Inheritance Tax – It’s on the House
Another neglected consideration is the burden of any inheritance tax on foreign property. As the individual in our scenario is a long-term UK resident, UK inheritance tax will need to be paid in respect of his worldwide assets, including the Laputan house. If the Laputan house is left by his Laputan Will to his daughter in Laputa, his UK executor (who is liable for paying inheritance tax in the first instance) has the right under English law to recover the inheritance tax due on the Laputan house from her. This could be problematic if she is left only with an illiquid asset such as a house and receives no other inheritance. In that case she may need to sell the house, possibly against her wishes, in order to reimburse the UK executor for a large inheritance tax liability. Her inheritance, poorly structured, thus becomes a nuisance rather than a meaningful benefit to her. (Note (i) that in practice, recovery of IHT from non-UK beneficiaries may be difficult to enforce, and (ii) that relief from IHT may be available if tax is payable on the same assets in Laputa, either by way of unilateral relief or by virtue of a double tax treaty.) Imagine a different scenario, where an individual leaves the UK for Laputa and loses her long-term resident status but retains a UK house for some years after her departure. This house (alone among her assets) will still be subject to UK inheritance tax on her death. She may opt to prepare only a Laputan Will, but her executors will still need to bear in mind the possibility that they may need to pay UK inheritance tax (and will certainly need to fulfil compliance obligations with HM Revenue & Customs even if none is payable) on her death. This could be the case whether she dies with the UK house still in her estate or whether she makes a gift of it in the seven years prior to her death.
Getting On Like a House on Fire
The scenarios above show that, when an individual requires multiple Wills or simply holds assets in multiple jurisdictions, it is essential that their advisers in different jurisdictions work together. If our testator in the first scenario above instructs an English solicitor to prepare a new Will for him several years after his Laputan solicitor prepared a Laputan Will, he should pass a copy of his existing Laputan Will to his English solicitor, and, if at all possible, put his two legal teams in contact so that the resulting documents will dovetail rather than clash.
Estate planning can be expensive and complex, but if carried out as an all inclusive, intentional exercise – instead of a series of piecemeal, spur-of-the moment decisions – individuals may prevent their succession plans for their foreign property from becoming castles in the sky. In the process a great deal of money and even more trouble can be saved.
For more information on succession and estate planning, please get in contact with Matthew Franks or call 020 7465 4300
