What Happens To An Australian Expats Estate If They Die Overseas? – An increasing proportion of our clients remain overseas well into retirement, and many acquire real estate in the form of a home or holiday homes whilst living overseas.
Most Australian expats don’t expect to die unexpectedly whilst living overseas and there is a tendency to leave succession and estate planning as something to deal with later on!!
In truth planning your estate when you don’t have any assets is probably a waste of money, but when you start to acquire property you should put succession and estate plans in order.
As an Australian expat there are several factors to consider, such as the rules of your country of residence, different financial structures, and local customs.
Australian Expat Estate Considerations In The UAE
In Dubai when an individual dies without leaving a Will, it is likely that his/her assets based in this jurisdiction shall pass in accordance with Sharia law, which is a system of forced heirship benefiting the natural parents, legal spouse(s) and natural children of the deceased, in fixed shares.
If you own substantial assets in Dubai, you would be well advised to consider preparing a will and having the will registered at the DIFC Wills and Probate Registry.
The DIFC Courts Wills Service is a joint initiative of the Government of Dubai and the DIFC Courts that gives non-Muslims investing and living in the UAE the option to pass on their assets and/or appoint guardians for their children, in accordance with the instructions in their Will.
The DIFC Courts operate on Common Law principals and not Sharia law.
Australian Expat Estate Considerations In The UK
For Australian expats living in Britain that have maintained a UK domicile they may find they are liable for UK Inheritance tax which is 40% of an estate valued over £325,000, and it is a tax on the worldwide assets, not just the British assets of the deceased.
For non-domiciled beneficiaries the inheritance tax will apply to the UK assets only. We have clients who were counting the days until their worldwide assets were released from the clutches of the Her Majesty’s Revenue and Customs (HMRC).
Australian Expat Estate Considerations in Europe
One of the reasons that Portugal is so popular with European expats for retirement living is the lack of an inheritance tax. Most European countries have inheritance taxes, but they are on average lower than those levied by the Britain and Ireland.
The purpose of this article wasn’t to review the world of inheritance taxes but rather encourage affluent expats to seek professional advice on succession planning issues and prepare and execute Wills in the jurisdictions they own assets in.
There may be options to structure your affairs in trust or company structures to help move assets to the next generation, but this planning is highly specialized and beyond the scope of this article.
What a good financial adviser will do for their client is look at their circumstances and establish what the real issues are and maybe come up with a solution that neither the clients nor their lawyers have even considered.