George Hay Chartered Accountants were one of the first accountancy firms in the country to obtain a licence to carry out non-contentious probate work. In our monthly column, we give you an insight into the process and provide an update on what is happening in the world of probate and estates.
We are dealing at present, with two large Estates where assets are held overseas; one with a significant number of equities in the USA and another with a property in Canada. So, why might this present a problem?
Is a UK Grant of Probate recognised overseas?
When administrating an Estate, you have to get a Grant of Probate. What you may not realise, however, is that the Grant is actually issued by the UK Judicial System i.e., it is an order of the Court.
It then follows that a UK Court only has authority over UK jurisdiction. It is not guaranteed that foreign countries will recognise this document.
Where the USA equities are concerned, the value of these is above the USA exemption before paying the equivalent of inheritance tax. Therefore, not only are we needing to apply for US probate, but we are also paying US tax on the Estate.
Double taxation relief exists so that any IHT paid in USA will reduce the UK liability. However, this is not always the case.
As an example, somebody in the UK may leave their Spanish villa to their spouse in trust for their life and then, upon their spouse’s death, it will pass to the children of the deceased.
In the UK, this qualifies for the spouse exemption so no IHT is payable. In Spain, the trust is ignored so the house is deemed to be left to the children and Spanish IHT is payable.
When the spouse dies, their share of the property is now subject to UK IHT. In Spain, it is a non-event as the trust was never recognised in the first place so there is no Spanish IHT.
However, the Spanish IHT paid on the first death cannot be off-set against the UK IHT paid on the second death as this related to different deaths.
Another problem can be with foreign Wills. We came across an Estate where a client had made a Greek Will, leaving his Greek villa to his new partner.
He then made a UK Will leaving all his assets to his children. The problem was his UK Will began “I hereby revoke all previous Wills and Testaments”. Unknown to him, this revocation automatically included his Greek Will ……..a time for litigation.
Therefore, where foreign assets are concerned, it is important to ensure full advice is taken as early as possible.
To discuss our Probate & Estates services in more detail, contact Huntingdon-based Barry Jefferd on 01462 708810, or you can email us at email@example.com where your enquiry will be dealt with by one of the team.
Authored by Director of GH Probate Ltd., Barry Jefferd.
Our Probate service is provided through GH Probate Limited. GH Probate is the trading style of GH Probate Limited. Registered in England and Wales number 9630102. Registered Office: St George’s House, George Street, Huntingdon, Cambridgeshire PE29 3GH.
Authorised to carry out the reserved legal activity of non-contentious probate in England and Wales by the Institute of Chartered Accountants in England & Wales