3_0_ScanMag_66_July_2014_Text_Svetlana:Scan Magazine 1
Scan Magazine | Business | Helena Whitmore
International families â€“ the complexities of giving and receiving By Helena Whitmore, senior wealth structuring adviser, SEB Private Banking UK
Those who are fortunate enough to have assets to give away to the next generation, whether in lifetime or through inheritance, can find that things get complicated very quickly as soon as there are international aspects involved. This is an area where it pays to make a careful plan, so that assets end up in the right place, with the minimum of delay and cost, and also without triggering unexpected tax consequences. Under English law, in principle it is possible to leave your assets to anyone (but dependants may still have a right to make a claim against the estate if they are not adequately provided for). Other countries have different succession laws, which may include forced heirship rules, meaning that fixed shares of the estate must be passed to certain family members. The interaction of these rules must be considered, and it should be noted that the succession laws in one country may override a will prepared elsewhere. Not having a will in place at all can be particularly problematic, because the laws of intestacy will then apply and the assets may not end up where the deceased had intended. Having to interpret which provisions apply in which country and arrange for assets to be released to the correct person can be a very expensive, time-consuming process, potentially avoided by the preparation of suitably worded wills. It may be appropriate to prepare wills in more than one country, to ensure that the estate can be administered more easily. There may also be inheritance taxes to pay, again potentially in more than one country, depending on the location of the assets and the nationality, residence and domicile status of the deceased and the
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beneficiaries. Some countries tax the estate of the deceased, others tax the beneficiaries, and in the absence of planning, the same assets may well unexpectedly be taxed more than once. Gifts in lifetime can cause similar levels of complexity. Many countries have gift taxes, which should be considered in all relevant countries. In the example of a Swedish citizen living in the UK, who wishes to make a substantial gift to his children, resident in France and the US respectively, the implications of the gift need to be reviewed in all four countries. Although Sweden abolished its inheritance and gift tax years ago, the fact that there is no Swedish gift tax to pay does not necessarily mean that the same applies in the other countries. The position in the UK depends on how long the father has been resident there, and where the assets to be given away are located, so the answer may be different depending on the exact circumstances. Both France and the US have a range of provisions which can cause problems in international situations. Planning also needs to be updated regularly, as the law may change somewhere along the line.
Within the Scandinavian countries, Norway also abolished its inheritance tax on 1 January 2014, so Norwegian families will now face a different set of questions compared to last year. Find a good lawyer with a good international network, and proceed with caution. For more information, email email@example.com or call 020 7246 4307
Helena Whitmore, senior wealth structuring adviser at SEB Private Banking UK
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