As summer holidays approach, many clients begin planning trips back to their favourite sunshine spots, and for an increasing number, that includes spending time in their own home abroad. Whether it’s a Spanish apartment, a Tuscan cottage or a Florida villa, overseas property is now a common feature of modern estate planning.
But while your holiday home may offer relaxation, the rules that apply to it on death are anything but simple. One of the most frequent queries we receive is: “Will my Scottish will deal with my property abroad?” The answer is… not always.
Which law applies to your holiday home?
Under Scots law, immoveable property (land and buildings) is governed by the law of the country in which it sits. Without careful planning, the default position is that a Scottish-domiciled person who owns a holiday home in France will have that property dealt with under French succession law, not Scots law.
This can come as a surprise, especially in countries with forced heirship rules, where children or spouses must receive fixed shares of the estate regardless of what your will states.
Will a Scottish will work abroad?
A Scottish will can include overseas property, but whether it will be recognised abroad depends on that country’s laws. Many jurisdictions require a local probate procedure, and some prefer (or insist upon) a locally drafted will.
For clients with overseas homes, we may recommend putting in place a foreign will tailored to the law of the country where the property is located; or an international will, depending on individual client circumstances and where it is appropriate and accepted to do so. Furthermore, careful cross-border drafting is essential to ensure that multiple wills interact suitably and do not accidentally revoke one another.
A word on inheritance tax
Clients are often surprised to learn that UK inheritance tax applies to their worldwide assets, including holiday homes. But additional local taxes may also apply overseas.
This can result in:
- Double taxation (relief may be available, but not guaranteed)
- Local notary fees
- Translation and legalisation costs
- Separate legal processes in more than one country
Early planning can help minimise both tax and administrative burdens for your family. Given the potential for conflicting rules across jurisdictions, specialist cross-border succession and tax expertise is crucial to ensure the right structures and documents are in place.
What can clients do now?
If you own, or are thinking about purchasing, a holiday home, consider:
- Ensuring you have the right will(s) in place for each jurisdiction
- Understanding how the local succession rules interact with Scots law
- Reviewing title structures and lifetime planning options
- Taking cross-border tax advice at an early stage
This is a timely task for the summer months — a “succession check-up” before you head off to enjoy the sun. If you are uncertain about any of the above, taking advice now can help avoid costly surprises later.
Final thoughts
A holiday home is a source of joy, but without proper estate planning it can create complexities for loved ones. By taking advice now, you can ensure your slice of sunshine passes smoothly to the beneficiaries you intend.
If you or your family own property abroad and would like tailored advice, our team is happy to help.
Contributor
Solicitor
