EU Succession Regulation

What does the Regulation do?

The Regulation concerns which country’s laws will govern the question of inheritance when you die. You need to know which laws will take effect in order to properly plan passing your assets on to your loved ones. Different countries’ legal systems have different ways of handling succession.

For example, many countries provide that certain shares in your estate are reserved for close family members (this is sometimes called ‘forced heirship’). Under English law, however, you can usually leave your property to whoever you want in your Will.

To complicate matters further, different countries have their own rules to decide which legal system applies in case of conflicts (known as conflict of laws rules). The interaction of these rules is often complicated and unclear, making it uncertain who will inherit your estate.

The Regulation operates to reduce this uncertainty by introducing common conflict of laws rules for the EU member states to which it applies. It was introduced in 2015 and applies to deaths on or after 17 August 2015. However, its operation may also change the effect of Wills and other means of estate planning that have been put in place before that date.

Although the Regulation does not directly apply in the UK, it affects the way that conflict of laws rules in England and Wales, Scotland and Northern Ireland interact with the rules of the applicable EU member states.

Which country’s law will apply to my estate under the Regulation?

In countries where the Regulation applies, the default position is that the law of the country where you are habitually resident at the time of your death will govern the inheritance of your estate as a whole.

However, this default position is overridden if:

• You were manifestly more closely connected with another country when you died (for example, because you had only just moved out of it).
• You choose to apply the law of your nationality instead. You can make this choice in a Will or codicil. If you have already made a Will in accordance with the law of your nationality, you may be treated as having chosen to apply that law even if your Will doesn’t mention this.

The UK has several jurisdictions where different legal systems operate (such as England and Wales, Scotland and Northern Ireland). If you are a UK national, you can choose to apply the law of the jurisdiction within the UK with which you are most closely connected. The same applies to other countries with more than one legal jurisdiction (such as the US, Canada, Australia and Switzerland), unless the country concerned has its own rules about this.

Countries where the Regulation does not apply will continue to use their own conflict of laws rules. Under the English rules, succession to a person’s immovable property (broadly land and buildings) is governed by the law of the country where it is located.

Succession to a person’s movable property (everything else) is governed by the law of the country where they are domiciled when they die. (Domicile is another complicated area of law but, in general, you are domiciled in the country that you consider to be your permanent home, even if you do not live there.)

What are the advantages of making a choice of law in my Will?

For many people, choosing to apply the law of their nationality will ensure that their estate is governed by the law with which they are most familiar.

Making a choice of law in your Will, also reduces uncertainty if any of the following apply to you:

• You are unsure where you are habitually resident or whether you are manifestly more closely connected with another country.
• The Regulation does not apply in the country of your habitual residence, in which case that country’s conflict of laws rules may lead to a different law applying.
• It is unclear whether a Will you have already made may be treated as making a choice of law.

The examples of common situations in this briefing note illustrate how making a choice may affect your estate. However, every case is different, and you should obtain advice about the potential consequences of making a choice in your particular circumstances and whether any existing Wills may be treated as making a choice of law.

What other effects does the Regulation have?

The Regulation does not only affect who receives your estate when you die. It may also affect:

Who administers your estate?

In England, the executors named in your Will (or your closest family members, if you don’t have a Will) collect in your assets, pay your debts and distribute the balance to your beneficiaries. In most EU countries, the beneficiaries themselves do this. If English law applies under the Regulation, the English system will be used, but this may cause confusion in countries who are not used to it.

How your estate is taxed.

The Regulation does not change the tax law of any country. However, UK inheritance tax, and similar taxes abroad, largely depend on who inherits your estate. If the Regulation changes who receives your estate, this is likely to have a knock-on effect on how your estate is taxed.

Who can make claims against your estate?

If foreign forced heirship rules apply, the people who benefit under these rules may claim their reserved shares if your Will attempts to override them. Alternatively, if English law applies, claims against your estate by spouses and civil partners (including ex-ones), cohabitees, children and dependents might be possible under the Inheritance (Provision for Family and Dependants) Act 1975. Our separate factsheet on ‘Excluding Someone From Your Will’ has more information on this.

Which court decides any disputes about your estate.

Each country also has rules surrounding the legal disputes its courts can decide. If you die at a time when you were habitually resident in a country where the Regulation applies, the default position is that the courts of that country will decide any disputes concerning your estate. Choosing to apply the law of your nationality can allow the courts of your nation to decide a dispute instead.

It is important to take all these factors into account when making a Will or carrying out other estate planning, such as making gifts or creating trusts during your lifetime.

Examples of common situations: