HARMONISATION: proposals may be incompatible with common law in England and Wales


Proposed changes to cross-border inheritance rules could have profound financial implications for the millions of UK people who live or own property in the EU, a joint paper from the Law Society and the Society of Trust and Estate Practitioners (STEP) has warned.



The paper was published in response to a European Commission green paper proposing the harmonisation of laws governing wills and succession across the EU. The pair said they feared that without effective lobbying from the government, civil law solutions might emerge that were incompatible with the common law system in England and Wales.



The paper pointed to recent Institute of Public Policy Research work which estimated that around two million Britons were living abroad within the EU, and 198,000 English households alone owning second properties there.



Richard Frimston, chairman of STEP's cross-border estates group and head of private client at London firm Russell-Cooke, said that 80% of his work nowadays had an overseas dimension - foreign nationals resident in the UK or Britons with assets or dependants in the EU.



He said: 'Harmonisation of the law is long overdue - our own law concerning domicile, for instance, is an antique doctrine that requires updating. As things stand, the complexity of the law is such that only the wealthy can afford to have it resolved. The little people have real problems.'



Murray Hallam, a wills and probate partner at City firm Withers and a member of the Law Society's wills and equity committee, said: 'EU succession issues are real and very important. There are different rules governing moveable and immoveable assets that require harmonisation, for example, as well as conflicting rules concerning gifts from the estate. And yet the government is continuing to take the least line of resistance and not putting sufficient resources behind its lobbying efforts.'



A Ministry of Justice spokesman said: 'The government is aware of the importance of the EU Commission's proposed regulation on cross-border succession and wills. The UK response to the green paper made clear both the government's commitment to bring real benefits to its citizens, who own property and live abroad in greater numbers than ever before, and the government's concerns about the implications of some of the suggestions made in it.'



Jonathan Rayner