As global travel and investment become increasingly accessible, it is no longer unusual for individuals and families to own assets overseas. Whether it is a holiday home in Spain, an investment property in France, or financial interests held abroad, these “foreign assets” can add a layer of complexity to estate planning that is often underestimated.
If you own assets outside the UK, it is particularly important to seek legal advice when preparing your will, planning succession, and considering inheritance tax. Failing to do so can lead to unexpected legal complications, delays, and unexpected tax liabilities for your loved ones.
What Are Foreign Assets?
Foreign assets include any property or financial holdings situated outside the UK. Common examples include:
- Holiday homes or second residences
- Overseas investment property
- Bank accounts held in other jurisdictions
- Shares in foreign companies
- Business interests abroad
While these assets may seem straightforward to manage during your lifetime, they can create significant issues on death if not properly planned for.
The Challenges of Foreign Assets in Estate Planning
- Different Legal Systems
Every country has its own legal framework governing inheritance and succession. In the UK, we enjoy extensive testamentary freedom, meaning you can generally choose how your estate is distributed. However, many countries have forced heirship rules, which dictate how certain portions of your estate must pass to specific family members (for example, children).
This potentially means that:
- Your UK will may not be recognised in the same way abroad
- Local laws may override your wishes
- Your estate could be distributed differently than intended
- Multiple Wills and Cross-Border Issues
In some cases, it may be advisable to have separate wills in different jurisdictions, one dealing with UK assets and another for assets abroad. However, this must be handled carefully:
- Poorly drafted wills can inadvertently revoke one another
- Conflicts between jurisdictions can arise
- Probate processes may be delayed
A coordinated approach is essential to ensure all documents work together seamlessly.
- Probate and Administration Delays
Administering an estate with foreign assets is often more time-consuming and complex. Your executors may need to:
- Navigate unfamiliar legal systems
- Obtain translations and notarised documents
- Instruct lawyers in multiple countries
Without proper planning, this can result in significant delays and increased costs for your estate.
Inheritance Tax Considerations
If you are UK domiciled, your worldwide assets (including those held abroad) are subject to UK inheritance tax, meaning foreign property will form part of your taxable estate and standard thresholds and rates will apply (subject to change), although reliefs may be available in some cases.
However, the country where the asset is located may also impose its own inheritance or succession taxes, creating a risk of double taxation. While relief may be available where a double taxation treaty exists, the rules can be complex, and professional advice is essential to ensure your affairs are structured efficiently and unnecessary tax liabilities are avoided.
Why You Should Seek Legal Advice Early
Engaging a solicitor with experience in cross-border estates at an early stage can help ensure your will is valid across all relevant jurisdictions, your wishes are properly protected, and potential tax liabilities are identified and managed, reducing the risk of complications for your executors.
Early advice can also highlight opportunities to structure foreign asset ownership more efficiently, make appropriate use of trusts or other arrangements, and coordinate effectively with legal professionals in other countries.
How Ellisons Can Help
Owning foreign assets can be a rewarding investment and a source of enjoyment, but it also brings additional legal responsibilities. Without careful planning, your estate could face complications that undermine your intentions and place unnecessary burdens on your family.
By taking specialist legal advice at an early stage, you can ensure your affairs are structured clearly and efficiently, giving you peace of mind that your assets, both in the UK and abroad, will be dealt with in accordance with your wishes.
At Ellisons, we have a robust international team and lawyers who specialise in cross‑jurisdictional estate planning, ensuring you receive clear, practical advice tailored to your circumstances. As a proud member of the Alliott Global Alliance (a worldwide network of trusted lawyers and accountants) we are also able to draw upon expert support in the relevant jurisdiction, giving you confidence that your foreign assets are managed with fully coordinated, international expertise.
