Familiar territory?

A version of the article below first appeared in the STEP Journal on 8 February 2024. The predominant reaction from practitioners who subsequently got in touch was surprise. The fact that there are distinctions between the succession regimes in Scotland and England & Wales is generally well appreciated. However, that those distinctions can be numerous, permeate apparently "straightforward" cases, and lead to unexpected results, is sometimes met with shock. The case studies below illustrate the potential impact of intra-UK cross border complexity in specific situations.

Since initial publication, the Trusts and Succession (Scotland) Act 2024 now provides that where an individual domiciled in Scotland, or holding Scottish real estate, dies intestate after 30 April 2024, not being survived by children or issue, the surviving spouse/civil partner of the deceased will now have the right to inherit the whole estate (provided they remained married/in a civil partnership at the time of death). It is potentially dangerous to rely on existing assumptions when dealing with clients connected to both jurisdictions. Proper advice should always be sought.

England & Wales and Scotland are linked geographically, culturally and politically. Movement between the two jurisdictions has always been common.

The implications of this for clients, however, seem to receive scarce attention in the legal press. This may result from the thinking that conflicts of private international law and double-taxation issues don't arise in Anglo/Welsh - Scots cases.

Indeed, the two jurisdictions apply the same principles of situs and domicile to determine the applicable law governing succession to immoveable and moveable property. They are also subject to same UK-wide capital taxation regimes.

Nonetheless, where internal succession rules are concerned, distinctions abound. The principles relating to beneficial interests, validity of wills, and devolution of testate and intestate estates provide a few examples.

The following case studies practically illuminate significant distinctions, and their implications.

Complexities of cross-border intestacy

Fred and Wilma married in 2020. Neither party has children. Fred has a Scottish domicile of origin. After Wilma, Fred's closest relatives are his father, and his only sibling, Julie.

Fred and Wilma own a home in Manchester as tenants in common. Fred's share is worth £250,000. Fred also owns a property in his hometown of Aberdeen, worth £400,000, and £800,000 of cash investments. Given Fred and Wilma are largely financially independent, Fred does not update his English will, prepared in 2016 when the couple acquired their Manchester property. This provides for Fred's estate to pass to trust for Julie.

Since retiring from a role involving extensive travel in 2022, Fred spends most time in Manchester, though returns to Aberdeen occasionally to see Julie.

Fred dies in October 2023. Wilma consults a Manchester-based solicitor, who considers that Fred died having acquired a domicile of choice in England & Wales.

Fred's will was not made 'in contemplation of marriage', and was therefore revoked on marriage to Wilma .

Assuming the solicitor's domicile analysis is correct, the intestacy provisions in England and Wales apply to determine that Fred's share of the Manchester property, all personal effects, and investments pass to Wilma.

The Scottish intestacy provisions however determine succession to the Aberdeen property. Wilma has no right to the property itself, as she would if she resided there when Fred died. She will receive £89,000 plus interest, realised on sale. Half of the remaining net value of the Aberdeen property passes to each of Fred's father and sister.

Wilma is exclusively entitled to take the Grant of Letters of Administration ('Grant'), from the Probate Registry in England & Wales. The Grant is recognised in Scotland, enabling Wilma to sell the Aberdeen property.

Fred's sister cannot bring a claim under the Inheritance (Provision for Family and Dependents) Act 1975, as Fred was not financially maintaining her before he died. She may wish to challenge Wilma's assertion of Fred's domicile in the Grant application, given she would receive half of Fred's moveable assets, if he retained his Scottish domicile of origin at death.

Majority matters

Cecile is domiciled in England and Wales. She wishes to pass significant cash to her four grandchildren, aged between nine and sixteen. She dismisses settling a substantive trust, confirming she is content "provided they can't demand it all before they're eighteen."

Her English solicitor creates a bare trust in May 2023, with funds held for Cecile's four grandchildren, equally. Her grandsons Bob (16) and Paul (15) have always lived in Scotland, with their mother (Cecile's daughter) Ruth. Ruth married their father, Fergus (a Scottish domiciliary) before their birth, but is now separated from him.

Bob can demand his share of the funds, having turned sixteen .

Paul dies in July 2023. Aged fifteen, he could have prepared a Scottish Will . As he did not, the Scottish intestacy provisions apply to 'Paul's' quarter-share, to benefit Ruth (25%); Fergus (25%), and Bob (50%).

The laws relating to succession in England & Wales and Scotland markedly differ. Advice should be sought from qualified lawyers in each jurisdiction, where clients have connections to both. Brodies LLP team consists of Scottish-qualified private client lawyers and English-qualified private client lawyers. For more information, please get in touch with a member of our team.