Brussels IV's impact on UK succession post-Brexit

How is EU law still affecting you in the post Brexit era?

Four years have passed since the UK officially left the EU, but this doesn’t mean that we live in an EU law-free world. 

Back in 2015, the EU Succession Regulation (Regulation (EU) No. 650/2012), also known as Brussels IV, was introduced to bring clarity and simplify cross-border estate administration following a death. The Regulation was never adopted by the UK and therefore the way it might affect your estate has not changed in the post-Brexit era. In fact, if you have assets linked to a European country, Brussels IV will be applicable to your estate. 

Brussels IV is a useful piece of legislation that can be used to achieve your estate planning goals. The Regulation gives you the option to determine which law applies to your estate, if this comprises assets situated in the EU. Specifically, Brussels IV allows you to choose your national law to determine the succession to property (including land or buildings) situated in an EU member state.

On the other hand, if you do not make an election in respect of the choice of law applicable to your estate, the law applicable to your succession can be determined by your ‘habitual residence’ or also the country which you were most closely connected to. This could be particularly relevant if, for example, you are planning on retiring to a warmer country in southern Europe. In this event, your habitual residence will change and in the absence of a choice of law election in your Will, that European country’s succession law might apply to your estate. Succession law varies dramatically between different countries. It is therefore essential that you make an informed decision as to the law that you would prefer to be applicable to your estate.

Brussels IV allows you to state in your Will that you wish for the law of your national country to apply.

The main advantage of this, especially for English nationals, is that the law of England and Wales allows testamentary freedom. On the contrary, several European countries have ‘forced heirship’, which means that your testamentary freedom is restricted by rules requiring a certain portion of the estate to be left to your direct descendants or spouse. Forced heirship rules cannot simply be avoided by making a Will or by relying on lifetime gifts. This is where Brussels IV can help you: by making an election in your Will, you can avoid that your testamentary wishes are limited by forced heirship applying to assets in your estate. 

Brussels IV determines only the applicable succession law and who can benefit from your estate, and does not govern taxation. It can on occasions though be useful to have the flexibility to, say, gift everything to a spouse and thereby benefit from additional relief. 

If you have assets, or you are thinking about buying a property in a European country this might be a good time to review your estate planning.

It is very important to regularly review your affairs and make sure that all is in order. We are very well placed to help you navigate the complexity of the laws applicable to multi-jurisdiction estates and advise as to how you can best protect these for future generations.

Our team of cross-border specialists will be able to structure your succession and help with drafting your Will. They will also be able to confirm the potential tax exposure of your estate and any reliefs that might be available.