Own a business or property abroad? Important factors to consider when making a Will

Wills, Trust and Probate expert, Tahsin Chasmawala, explains what should be considered when writing your Will

If you own property abroad or have an interest in a business, there are several aspects to consider if you wish to leave these assets in your Will. There can be complex issues with different taxes and laws to consider. Obtaining appropriate advice is essential to ensure that the most tax efficient route is taken but also, crucially, that your Will is in line with your wishes.

Overseas property

The law of England and Wales requires that Personal Representatives (those tasked with obtaining Probate after you pass) declare all foreign property in the deceased’s estate when making an application for a Grant of Representation.

In addition, if you own a property abroad but are still resident or deemed domiciled in England and Wales, you may still be liable for Inheritance Tax on these assets when you die. We can advise you on the current Inheritance Tax laws and the impact overseas property may have on your Inheritance tax position in this country when you die.

It will also be important to be aware of both the tax laws and inheritance laws of the country in which your property is based.

Taxes may be payable on the property in the foreign jurisdiction as well as in England and Wales. Certain jurisdictions - for example France or Spain - have different succession and inheritance laws to the England and Wales which may mean assets in those countries do not pass in the same way as they would here. It is very important that your Will stipulates exactly who you want to inherit your property abroad or the governing law of that country may dictate otherwise.

In addition, we also recommend that you seek advice from a legal expert in the countries where you have property. A separate Will may be required in each jurisdiction in which you have a property. Your solicitor must also take steps to make sure that your English Will is not invalidated by any that relate to your overseas assets.

Passing on a business

Whether you are a sole trader, in a partnership, or own part of a limited company, it will be important to set out in your Will what should happen to any of these interests when you die.

Some of your first considerations should be:

  • who is most suitable to continue your business?
  • are there any partnerships or company agreements which stipulate what happens when you pass?
  • what will be the impact on the business and the remaining owners of passing your share to the intended beneficiary?

In addition to considering who should inherit your business or business interest, we can advise you on the tax implications associated with passing on a business.

Business Property Relief is a tax relief available in most circumstances where you have owned a business or an interest in a business for over 2 years. It is best to seek advice on the specific situations in which this relief will apply and how best to maximise your estate’s overall tax reliefs.

Consideration will need to be given to who will inherit as some ways of passing your business or business interests may be more tax efficient than other methods, depending on who you are passing the interests on to. It is therefore important to consider your individual circumstances and who your potential beneficiaries may be.

How can we help?

Business and overseas property are important assets to consider when making a Will. Getting legal advice in relation to this will ensure that these assets pass in the way you would like them to, and your estate does not suffer from any unexpected tax liabilities. 

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Every care is taken in the preparation of our articles. However, no responsibility can be accepted to any person who acts on the basis of information contained in them alone. You are recommended to obtain specific advice in respect of individual cases.