Holiday home/Retirement planning: will Brexit wreck it?

16 July 2018

As the summer holiday season approaches, those of you lucky enough to have property abroad may be preparing to decamp to your rural idylls in Tuscany, Provence or Southern Spain. Football fans aside I’m also told Croatia is an increasingly popular holiday home destination.

A question you may ponder as you relax on that sunlounger in the weeks ahead is whether you need to review your will arrangements for any EU based property in light of Brexit.  Or whether Brexit will complicate your plans to retire there.  

Here are some thoughts:

Regardless of your domicile, the succession of overseas real estate is really a matter for local law, so you will need local law advice on what is possible. That said, since 2015, all of the EU states apart from the UK, Ireland and Denmark have been subject to the European Succession Regulation which enables individuals to select the law of their nationality to apply to the worldwide succession of their estate (including real estate in Italy, France, Spain and so on). So, if you are an English or Welsh national, you can make a Will which achieves your succession arrangements for any real estate in the EU.

Interestingly, the position does not change with Brexit because, even back in 2015 when we were still fully in the EU, the UK never signed up to the Regulation. Accordingly, because  it is not an English law concept, it would still be advisable to check with a local lawyer that the nationality election you want to make in your Will under the Regulation is acceptable from a local law perspective.

Many countries in continental Europe (France, for example) have matrimonial regimes. This means that at point of death, the division of assets between spouses often applies in priority to any other person’s promised succession rights. So it makes sense to take local advice to know what you can actually achieve and if you need to make any matrimonial regime adjustments (assuming possible).

As for retirement planning, relocation may indeed be more complicated post-Brexit.  After 31 December 2020, free movement will end so Brits wishing to move to the EU will be subject to the normal immigration rules of the country they wish to reside in (eg a maximum 3 months as a visitor, Golden Visas etc). If you decide to relocate on a full time basis before that, after 31 December 2020 you will effectively be landlocked in the EU state you choose and won’t be able to move freely elsewhere within the EU. It follows then that if you are thinking of retiring in a number of EU countries after 31 December 2020, it might make sense to bring your plans forward and apply for EU residence documentation now, to grandfather yourself in. You should be entitled to apply for citizenship rights in your target country based on their domestic law (e.g after 5 years' residence in Ireland or Belgium).

There will doubtless be tax, social security and national health insurance etc implications to consider too post-Brexit, the detail of which remains to be seen. If you do properly relocate and change domicile, your executors may encounter more (but probably all surmountable) succession obstacles in the English jurisdiction, due to the greater level of separation you will have from here.

Brexit aside, if you have property abroad, it is always advisable to take local law advice about your succession plans vis a vis the property rather than simply relying on a ‘standard’ English Will. The planning costs you pay now could be vastly less than costs which may arise if you leave planning points unexplored.

Your EU retirement plans are harder to provide guidance on at this point due to ongoing political uncertainty. It may just be easier for you to live abroad for certain months of the year without changing your domicile from England & Wales. But the position will no doubt be clearer when we know the final shape of the UK’s post-Brexit relationship with the EU.

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We welcome views and opinions about the issues raised in this blog. Should you require specific advice in relation to personal circumstances, please use the form on the contact page.

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