Landlords call for housing court reforms
Private landlords have added their voice to calls for the creation of a dedicated, properly funded housing court to tackle…More
Sara Janion, Managing Director, of Worldwide Lawyers – a UK based service connecting UK solicitors with foreign law firms – offers her advice on the dos and don’ts of dealing with an estate which includes foreign assets. Sara is also a qualified solicitor of England and Wales and Notary Public.
Q: What are the main things to consider when handling an estate which includes foreign assets?
Many people dealing with an estate tend to leave the administration of the foreign assets to the end but it’s really important to be proactive and get advice from a foreign lawyer straight away so that you can consider the implications of any foreign assets from the outset. There’s a lot to consider. Are there are any deadlines in the overseas jurisdiction for filing documents or inheritance tax payments? Is there a foreign will? Does this will intentionally or unintentionally revoke the UK will? Can the UK Grant be resealed or is a separate inheritance process required? Will Medallion Signature Guarantees or overseas bankruptcy searches for beneficiaries located abroad need to be budgeted for?
It’s best to understand what you’re dealing with from the outset to avoid complications and delays later.
Q: What one piece of advice would you give to UK lawyers handling estates with overseas assets?
Other than as mentioned above – consult a foreign lawyer straight away – I always recommend that UK solicitors consider the effects of currency exchange on the value of overseas assets. When I worked as a solicitor, I was reminded to administer any shares quickly due the fluctuation of share prices, but no-one ever mentioned the effects of currency exchange.
Failing to consider the most cost-effective way of repatriating the foreign assets can, however, unnecessarily cost the estate a significant amount of money.
To ensure that you’re acting in the client’s best interests (and to avoid liability to you and your firm), I always recommend contacting an FCA regulated currency specialist to assist with the transfer of funds internationally, as their superior exchange rates can typically save the estate up to five per cent of the amount transferred!
Q: What’s the worst mistake you’ve ever come across in relation to foreign assets?
A: There are a couple that spring to mind. I was recently contacted by a UK solicitor who wanted to instruct a Spanish lawyer to assist with the transfer of the client’s Spanish property pursuant to his estate and tax planning report for their client. However, the UK lawyer hadn’t considered that there is gift tax in Spain which completely undermined the tax mitigation plan.
The worst though has to be when a UK lawyer ending up unnecessarily costing their client c. $90,000 in US inheritance taxes after incorrectly completing a US tax form. Fortunately, we were able to claim a refund, but it was a very stressful, not to mention embarrassing, time for the solicitor which could have been avoided if he’d consulted a lawyer in the foreign jurisdiction in the first place!
The laws that can apply overseas can often be surprising and on occasion bizarre. Every jurisdiction is different. So, always get advice from a lawyer in the foreign jurisdiction as early as possible.