A guide to Cross Border Estates – UK Estates with Property in Ireland
In dealing with many UK Solicitors and Legal Personal Representatives[1] over the years it has become apparent that often situations can arise that result in principles of Irish law having applicability in the estates of foreign domiciled individuals. We regularly provide Irish Probate assistance to UK solicitors when they are dealing with an estate that contains an Irish property.
In light of this a brief understanding of such principles and a cautionary word as regards their applicability is warranted.
Deceased’s domicile and property abroad
Generally, the rules concerning Conflict of Laws /Private International Law govern situations where a person dies domiciled abroad leaving movable or immovable property in Ireland.
These rules apply to intestate and testate estates as follows:
Intestate UK domiciled individuals with Immovable Property in Ireland
It is established that movable property will be dealt with under the law of domicile of the person who dies intestate while the immovable property will be dealt with by the law of its location.
Thus, immovable Irish property, such as a holiday home, will be dealt with under the Rules of Intestacy set out in the Irish Succession Act, 1965. In brief, the order of entitlement to inherit under these rules is as follows: –
- Spouse/civil partner (and no issue[2]) – Spouse/Civil Partner takes all
- Spouse/civil partner[3] and issue – spouse/civil partner takes 2/3 and children take 1/3 per stirpes[4]
- Grandchildren
- Great-grandchildren
- Great-great grandchildren
- Parents
- Brothers and sisters[5]
- Nieces and nephews
- Grandparents
- Uncles and aunts
- Great-grandparents
- First cousins/great uncles and aunts / great nephews and nieces
- Great-great grandparents
These rules are quite different to those governing UK intestacies and often their applicability to immovable property in Ireland impacts on the surviving spouse and children.
Indeed, there have been many cases where the surviving spouse/civil partner has suffered a loss in the Irish immovable property due to the difference in the Rules of Intestacy in the two jurisdictions and the applicability of same.
Testate UK domiciled individuals with Immovable Property in Ireland
Where a UK will is executed which purports to deal with all worldwide assets complications can arise when dealing with immovable property in Ireland.
Rules of forced heirship can interfere with the provisions made in the will and lead to unintended consequences.
Under section 111 of the Succession Act, 1965 a surviving spouse/civil partner is entitled to a legal right share of the deceased’s estate of half if the deceased left no children and one third[6] if the deceased left children.
The result of this entitlement can be that the surviving spouse/civil partner inherits a proportion of immovable property in Ireland contrary to the deceased’s wishes as expressed in their will.
This can cause a fracturing of the ownership of the property and indeed give rise to the future need for an additional Irish Grant of Representation (upon the death of the surviving spouse/civil partner).
Conclusion
The above issues often only come to light during the administration of the deceased’s Irish estate and at that stage there is no opportunity to rectify the situation.
It is crucial, therefore, that at the stage of will drafting the testator is fully advised of the applicable law of all assets and appreciates the significance of Irish law on any Irish immovable assets. Once the testator has been so advised an informed decision can be made and any additional steps to ensure that their decision is effective can be taken.
Clients may need an Irish will to deal specifically with Irish assets and indeed Irish inheritance taxation (Capital Acquisitions Taxation) advice should be obtained. The applicability of Irish inheritance taxation is far reaching with inheritances of all assets situated in Ireland being taxable regardless of the domicile, residence or ordinary residence of the deceased or beneficiary.
If you need any assistance with UK Estates involving Irish property please contact us.
References:
[1] This term will be used to refer to Executors and Administrators.
[2] Issue meaning lineal descendants: child, grandchild, great-grandchild etc.
[3] It should be noted that the intestate share of a civil partner is not absolute in that issue of the deceased can apply to the Court for enlargement of their share on intestacy under s. 67A(3).
[4] i.e. Grandchildren as issue of predeceased child, if any, will keep parent’s share alive and divide it equally among them and so on.
[5] Nephews/Nieces issue of any predeceased brothers and siblings will keep their parents share alive and divide it equally among them.
[6] It should be noted that the legal right share of a civil partner, unlike a spouse, is not absolute in that a child of the deceased can apply to the Court under s. 117(3A) for provision to be made for them which can affect the legal right share of the surviving civil partner.