Since the 1th of August 2015 new European rules are applicable in order to simplify international successions, with the aim to allow them to be treated with less delays and more efficiency. Before that date trans-borders succession were often governed by different laws.
If a French citizen owned a flat in Berlin, it was necessary to open, after his death, a succession in France under French laws and another in Germany under German laws. For persons deceased after the 17th of August 2015, only one succession will be opened for all the owned properties.
Before looking at the legal aspects of international successions, we precise that the subject concerns the succession of a person deceasing outside his country of origin or residence, with properties owned in this country.
In such cases it is necessary to determine which law will be applicable to the succession.
The new rules concerns all properties located in the European Union, independently from the country of residence of the deceased person, with some exceptions: the U.K., Ireland and Denmark decided not apply such rules. The consequence is that for British nationals residing in France the succession will follow French laws for their properties in France and British laws of properties in the UK. The properties of French citizens in the UK will follow the British laws, while his properties in France will be under French laws.
The new rules are applicable to succession through a will or trust, when it exists, or through laws in force in the absence of a document prepared by the deceased person. It excludes other fields such as matrimonial regimes, gifts and taxes applicable on succession.
The law applicable to the succession is the country of habitual residence at the time of the death, for all the owned properties, however any person can designate through a will the law of the country of its citizenship instead of the one of the country of residence. The persons with several citizenships can choose one of their national laws.
Establishing a will designating the national law will avoid uncertainty. The Notaries, by establishing the European Network of Wills Registry, allowed the possibility to search for wills of deceased persons within the European Union.
Once the heirs determined, they will receive all the properties of the deceased person, no matter where they are located. For instance if a person decease in the Netherlands while owning properties in France , Belgium and Germany, the Nederland law will determine who are the inheritors and the proportion to be received by each of them. A Notary from the Netherlands will need to work with a French Notary who will be competent to organize the succession for the properties located in France. He will apply Netherlands laws and may ask for a European succession certificate: this document shows who the inheritors with their rights and obligations are. It is recognized in all the European Union states.
This certificate is delivered, in France and in most of the European countries, by the Notary. In its absence it will be necessary to check the local rules after each change of country of residence.
Tax on succession
When a person is deceased abroad, the delay is extended from 6 to 12 month to make a declaration to the French Tax Authority. In principal the state where the deceased person had its domicile has the right to tax the worldwide assets.
When the deceased person had its domicile in France, it is necessary to check where the heirs were domiciled and the existence or not of a treaty to avoid double taxation. France has regularized a treaty with several foreign counties and in such case the tax paid abroad will be deducted from the tax to be paid in France.
To sum up we can state that
A person must first of all decide if the laws governing its succession will be the one of the country of residence or the country of its nationality. This choice must unchallengeable. A will shall avoid all kind of uncertainty. The will shall be valid when it is conformity with the laws of the country where it was set up.
One can choose the law of country of the European Union or any other state. The fact that the succession is governed by one law, foreign or local, will have no influence on successions taxes, as they are excluded from the above mentioned regulations.
This document is non-contractual and has been produced for informational purposes only – May 17, 2017