Can I still use my existing Will choosing English law after Brexit?
Question
Can I still use my existing Will choosing English law after Brexit? Do I need a new Will?
Many thanks for your help
Answer
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 made an election of the law of your nationality in your Wills, then France will apply your national law under the EU Regulation.
This would mean that the terms of the Will are carried out irrespective of any French reserved heir rules.
If there is no express election of the law of their 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 allow for estates where the testator had not changed their Will since the EU Regulation came into force on 17 August 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 17 August 2015 there needs to be an express election of English law, and estates can no longer rely on alleging an implied choice of law.
A major warning – whilst you can elect English law, you cannot elect UK inheritance tax.
French inheritance tax still applies, so you need to tread carefully.
Spouses are exempt from inheritance tax in France. Children benefit from 100,000 Euros tax free from each parent they directly inherit from.
However, unmarried partners, step children and friends, are taxed at 60% inheritance tax.
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 doesn’t change the validity of your Wills, nor does it improve the French inheritance tax position. However, for legacies to UK Charities, Brexit makes things a whole lot worse.
Now might be a good time to review your Wills, and make sure that there is a valid election of law where required, 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).
John Kitching
French Law Consultancy
Published in the September 2020 Connexion France magazine