People throughout the UK regularly move between England and Scotland, often completely unaware of the legal consequences. Aside from income tax rates, stamp duty rates (LBTT in Scotland), and accents, most of day-to-day life is unchanged. Many movers are unaware that succession law – i.e. what happens to your assets when you die - is very different on either side of the border.
We consider a fictional family – the Brodies – who have chosen the good life in the Scottish Highlands for their retirement.
The facts
Mr and Mrs Brodie retired to the Highlands 10 years ago. Despite their Scottish surname, they were both born in England to English parents.
After successful careers in London, they bought a property in Scotland and went 'all in' on an ambitious redevelopment. A well-known TV show featured their project and, like all the grandest designs, it ran significantly over budget and used up most of their savings. The couple retained a flat in London, but planned to see out their days in the Highlands.
Their two adult children, Jack and Jill, have very successful careers. Mr Brodie also has a child from a previous marriage, Amy, who is 10 years older than Jack and Jill. She gets by financially, but is far less successful than Jack and Jill and feels a bit forgotten about by her dad and half-siblings.
Sadly Mrs Brodie died 2 years ago. Mr and Mrs Brodie had mirror wills, leaving their whole estate to each other on the first death, and then to Jack and Jill only on the second death. Heartbroken and very lonely in the Highlands, Mr Brodie began to develop dementia, although it is unclear when this began. With the help of Amy, Mr Brodie travelled to London in order to receive residential medical care. Amy visited regularly. Jack and Jill were far too busy to visit, but found time sell both the London flat and the Highland home on Mr Brodie's behalf. Both properties sold instantly and, thanks to the TV fame, the Highland home sold for multiple millions.
Soon afterwards Mr Brodie sadly died. Under Mr Brodie's will, everything in the estate (less inheritance tax) passes to Jack and Jill. They proceed with the estate administration in London and look set to inherit the lot, about £6m in total. Understandably, Amy is upset and extremely worried about how she will survive. She seeks legal advice on her position.
Different inheritance regimes
Amy first needs to understand that Scotland and England have very different succession laws. She needs to know which applies to the estate, and what the consequences for her would be under each:
England and Wales succession law
The starting point under the law of England and Wales is testamentary freedom. Each person is (broadly speaking) free to leave their estate however they choose in their will. This principle is subject to exceptions, most notably the Inheritance (Provision for Family and Dependants) Act 1975 (1975 Act), which protects certain family members and dependants from being cut off financially. It is unlikely to apply to Amy on these facts and she will receive nothing.
Scottish succession law
Scottish succession law on the other hand, includes forced heirship rules called 'legal rights' which give spouses and children automatic rights to a fixed share of the moveable estate (i.e. the non-real estate assets), whatever the will says. In Mr Brodie's case, his children (including Amy) would inherit 50% of the estate between them in equal shares under legal rights. She would receive c.£1m on these facts.
The importance of domicile
To decide which law applies, the deceased person's domicile at the date of their death must be established (however note that this is a different concept to 'deemed domicile' for tax purposes). Domicile can be a complex question and depends on a detailed analysis of the facts. In very general terms, everyone starts with a 'domicile of origin' (usually your parents' domicile when you were born – for Mr Brodie this would be England, but this can be a complex question in itself) but may later acquire a 'domicile of choice' if they move to another country with the intention to stay permanently. A further move can result in further changes to domicile, but it is the position at death that matters.
Where does Amy stand?
Our case study highlights the stark differences in inheritance law north and south of the border and the importance of domicile at death.
In this scenario, the question of domicile is arguable and would turn on more detailed nuances than this article allows. Amy would likely argue that Mr Brodie had retained his domicile of choice in Scotland and moved to England only for medical care, with the aim of securing her £1min legal rights. To support this argument, Amy may cite the case of Proles v Kohli [2018] EWHC 767 (Ch)Jack and Jill would no doubt argue for English domicile to ensure Amy gets nothing.
Small changes in circumstances could turn the dispute on its head. For example if the properties had not been sold before Mr Brodie died, then Amy's legal rights in Scotland might be worthless (legal rights do not apply to real estate assets). If Amy was in dire financial straits, receiving hand-outs from Mr Brodie, or had health issues, then she might have a good claim under the 1975 Act, but only if Mr Brodie is English domiciled.
Scenarios such as this are all too common when people decide to move their lives to a different country, and in the case of moves between England and Scotland people are often completely unaware that they are in a different legal jurisdiction. Taking expert advice can help you successfully navigate these difficulties, via careful planning before death or when dealing with someone's probate / executry.
The English personal law team at Brodies are able to advise on a wide range of succession planning both north and south of the border. Where potential conflicts arise, the private wealth disputes team have experience resolving disputes both in and out of the courtroom. For more information, please get in touch.
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