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Cyprus Eastern Forum Index » Legal Questions & Issues » Forced Heirship
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Forced Heirship 
Post: #1   PostPosted: Sun Nov 20, 2016 12:18 pm Reply with quote
milano
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I am about to make a Cyprus Will; all my assets are in Cyprus and I am a permanent resident.

I'd just like to clarify a point that I'm not sure of: can I name 2 beneficiaries in my will, one is not related to me, the other is a Charity, although I have two first cousins and one 2nd cousin, all resident in the UK?

Advice would be good.

KIZI
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Post: #2   PostPosted: Sun Nov 20, 2016 3:51 pm Reply with quote
nhowarth
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Hi Kizi,

You can choose under which jurisdiction your estate will be dealt with:

1. Your national law.
2. Cyprus Law (Domicile of habitual residence)

Unless you state otherwise in your Will, option 2 will apply (forced heirship).

If you want the law of your nationality to apply, you'll need a clause in your Will along the lines of the following:

I, (your full name), wish the devolution of my property in Cyprus to be governed by the Law of my Nationality, namely (country) Law.

Regards,

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Post: #3   PostPosted: Sun Nov 20, 2016 5:48 pm Reply with quote
jeba
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nhowarth wrote:

If you want the law of your nationality to apply, you'll need a clause in your Will along the lines of the following:

Would that affect the inheritance tax as well (would it apply according to which state´s law you choose)?
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Post: #4   PostPosted: Sun Nov 20, 2016 6:55 pm Reply with quote
nhowarth
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jeba wrote:
Would that affect the inheritance tax as well (would it apply according to which state´s law you choose)?


Possibly, depending on your nationality. I believe that France has forced heirship rules as does Germany. (UK nationals are fortunate in this respect as they can leave their estate to whoever and whatever they wish.)

Inheritance Tax is based on domicile. If you're domiciled in the UK you (or rather your estate) will be liable for Inheritance Tax. Domicile is a complex matter and better left to experts in the subject to deal with.

Regards,

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Post: #5   PostPosted: Mon Nov 21, 2016 7:17 am Reply with quote
milano
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That's very helpful Nigel thank you and makes it all very clear for me. What's "interesting" is that the solicitor I instructed to prepare my will hasn't queried which country law I would like to apply, or indeed mentioned it at all! I'm now eagerly awaiting to see the draft when it arrives!

KIZI
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Post: #6   PostPosted: Mon Nov 21, 2016 7:37 am Reply with quote
FSB Properties
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milano wrote:
That's very helpful Nigel thank you and makes it all very clear for me. What's "interesting" is that the solicitor I instructed to prepare my will hasn't queried which country law I would like to apply, or indeed mentioned it at all! I'm now eagerly awaiting to see the draft when it arrives!

KIZI


That may be because the change (removal of the clause) only happened July 2015 and if he had written the will before that then there would have been no need to ask.

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Post: #7   PostPosted: Mon Nov 21, 2016 6:26 pm Reply with quote
jeba
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Up to what amount would there be no inheritance tax if you opt for Cyprus law and leave everything to your kids?
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Post: #8   PostPosted: Mon Nov 21, 2016 6:58 pm Reply with quote
pantheman
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jeba wrote:
Up to what amount would there be no inheritance tax if you opt for Cyprus law and leave everything to your kids?


There is no inheritance tax in Cyprus.
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Post: #9   PostPosted: Tue Nov 22, 2016 7:26 am Reply with quote
Baggysdad
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As Nigel points out, UK inheritance tax is based on domicile. The election of laws to govern the distribution of your estate is based on nationality.

Electing for your Cyprus estate to be distributed according to Cyprus law won't have any effect on exposure to UK inheritance tax if someone is domiciled in the UK. In fact it might make the UK tax liability worse because Cyprus law requires a share of the estate to be paid children who wouldn't be exempt from UK inheritance tax while a spouse would.

Again, as Nigel points out, grasping domicile is like grasping jelly and needs careful consideration on a case by case basis and is not something that can be worked out in a forum exchange.

Bottom line, don't look to the EU succession law as a means to escape UK inheritance tax. Smarter minds than me explored and discounted that well before the legislation was implemented.

Paul
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Forced Heirship 
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