International succession planning is no longer only for the very wealthy

Date: 24 Jun 2015

Citywealth

James Ward, partner and head of Private Client at Seddons, says even the clients with assets between £1 million to £10 million now have an international element to their succession planning.

Tell us about some interesting cases of succession planning you have been dealing with recently?

A couple of current succession cases I have on my desk involve marriage and cross-border issues all rolled into one. The first involves a UK resident, New Zealand citizen but born in the Philippines, with property in Australia and the UK, about to enter into a same sex marriage with his Italian partner, then move to Italy and buy property over there.

The second is a Scottish-born, New York-based client whom we recently acted for in his divorce. He has property in the UK, Spain, Ireland and the US. He is about to marry his new partner who is a Canadian national.

Both cases pose a number of cross-border succession issues, both in terms of the property involved, as well as reviewing what jurisdictions are relevant. They also have different estate duty issues, which will change when they get married.

Interestingly, the issues will continue to change as they move around or look to stay permanently in their current location. For instance, over time the US-based client may pick up US domicile and then not be chargeable to UK inheritance tax on any assets outside the UK. Or, both clients can potentially rely on the new EU Succession Regulation when leaving their assets based in a Brussels IV country. Their citizenship could then override the forced heirship provisions in the civil law jurisdictions. However, their current habitual residences will not have the same effect.

What lessons we can learn from them?

That succession planning now is international, complicated and a ‘movable feast’, as people live increasingly mobile lives.

A solicitor or accountant needs to be in regular contact with their client in order to make sure proper local advice is taken where necessary.

You work with many clients from the Middle East. What are the particularities of succession planning in this region?

I have a number of Middle Eastern clients who have property in the UK. It always surprises them that, in spite of their own strict succession law rules, they can leave UK real estate by a UK will to whomever they please. However, any furniture in the flat would technically pass by Sharia law, as they are moveable assets.

What trends are you seeing in succession planning you can tell us about?

Being based just behind Selfridges certainly attracts a great number of clients with overseas connections. I am now finding that almost all my clients have an international element to their succession planning. It is no longer the preserve of the very wealthy Рclients with assets between £1 million to £10 million will often have an international element.

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