The English text of the Proposal for this new Regulation has just been published. This will put to rest most of the dispute and conflict between different European laws on succession.
I have recieved this query which I am posting to start off a debate perhaps with people in similar situations:" I am resident in Italy as from April this year/wife becoming resident later this year.
This was a question from another member in another thread, I though it was worth starting a discussion on this point:"I understand if you are renting your property to a person who is elderly(or maybe there is no age limit) you cannot force them t
The 2005 Green Paper on Wills and Succession recommended that the conflicting succession rules in many European countries should be harmonised by a new EU Regulation.A Regulation is a European law which is directly applicable to all member states,
Dear Sarah, This would not necessarily be very complicated but could be quite costly. It will involve signing another deed of transfer with a Notary Public, and then the property could be registered in your sole name. The deed should preferably be in the form of a sale (with evidence of money changing hands ie a copy of a bank transfer which would be attached to the deed of transfer) rather than a donation. A donation could lead to difficulties with reselling in the future as in Italy any donations made are challengeable by heirs after the death of the donor, so are best avoided. You will need a Notary to advise you on the costs, which will involve their fee (onorario) plus the registration taxes (imposte di registro) which are calculated on the catastal value of the property. The purchase price of your brother's half need not be for the real market value but it should be at least the amount they orginally paid for their share. Both you brother and sister will need to sign the deed of transfer, although they can give power of attorney for this if they cannot come to Italy. Hoping this is helpful let us know if you need any more information to help you make a decision. Charlotte Oliver
I have worked with many different Notaries in all parts of Italy. They belong to a body called Consiglio Nazionale del Notariato which has a website with an English language version. Complaints against individual Notaries are not handled by the national body but the district council to which a particular Notary belongs. While Notaries are in the majority highly educated and very professional, there is no doubt that they do make mistakes which often go unnoticed in a deed of succession or purchase for many years and then are very costly to rectify. I notice that many deeds are drawn up by the Notary's assistant and then not property checked when they come to be signed. Notaries are not above the law and there is a large amount of caselaw in recent years on the level of responsibility and professional care they have to exercise. A declaration of succession should be a simple document but again requires careful preparation, calculation of catastal values of property, inheritance tax, and in particular the determination of heirs where a foreign law applies to the succession, which is not always straightforward. Alex can you tell us what the point of contention is? Charlotte
I do not agree that Italian succession law should apply to the succession of British nationals, although I agree there is a risk of this interpretation being made if a person dies intestate. To summarise very simply the current law on succession law in Italy for non-Italians: Art 46 of law 218/1995 states that "the succession is governed by the law of the nationality of that person" This means a British citizen's succession should be dealt with by the law of England and Wales/Scotland or Northern Ireland. But the word "law" means the whole law of that country and includes also the rules of conflict of law. English law may in turn send the issue back to Italy, stating that immoveable property should be dealt with by the law of the country where it is situated and moveable property should be dealt with by the law of a persons domicile (either domicile at birth or domicile of choice if domicile has been changed after the age of 18 with a clear intention to live in a new country permanently). Art. 13 of the Italian law 218/1995 says that Italy can accept the referral (known as renvoi) back to Italian law. BUT, and this is a very important BUT, I always advise British citizens that they may make a will in which they state they wish English law to deal with all aspects of their succession. This therefore allows them the choice (the "professio iuris") to make a will according to English law, ie leaving all their property to their spouse and not being bound to follow the Italian law of statutory shares. Although there is always a small risk that disgruntled heirs (ie the children) would make a challenge (depending on jurisdiction this could be in the courts of Italy or in the UK) saying the renvoi rule should apply regardless, this is a very small risk, and there is indication in caselaw of other countries that shows both an English or and Italian judge may reject the renvoi and uphold the right of a British national to leave his proeprty as he wishes according to his natural law (this Roman law principle is called "universality of succession"). The law is about to change dramatically. The new EU regulation on wills and succession (which will be in force from about 2012) will state that succession will follow the law of a person's habitual residence UNLESS they have made a will stating that they wish their national law to apply. I advise people to make a formal will with a Notary Public, and not risk keeping holographic wills which could be lost, destroyed or mis-interpreted later on. For the reaons above, making a will in Italy is most important in the case that you do not wish you succession to follow the Italian law on forced heirship. Charlotte
I only heard about the new forum last week, and reading this thread yesterday was curious to have a look....I spotted a few familiar names and had not realised where they had disappeared to. But I was quite shocked to read some of the content (this is probably giving the new site even more publicity!!), bad language, abusive to other members and the administrators (of Italymag) and just seems to be a competition for who can criticise Italymag with the wittiest post...nothing much relevant to life in Italy. I find it hard to understand such an acrimonious split over what should be a friendly information website. Am I wrong? Perhaps I should not even join in the debate here or encourage it, I think everyone has more important things to talk about... Charlotte Oliver
Hi Penny, If neither the parents are Italian, a child born in Italy does not automatically acquire Italian nationality, but can apply for it if resident in Italy up to age 18. I think your child will only be entitled to British nationality at birth. By the way, nationality has no bearing on liability for UK inheritance tax, unfortunately. Domicile is the issue here. Whether your property is taxable on your death in the UK or in Italy depends on your own, not the childs, domicile at the time of death. Charlotte
Can members start new posts for new topics? I have tried to start a new post on UK domicile and IHT to cover Grania's question, but I keep getting an error message! If your UK will covers "all your property worldwide", and you are considered domiciled in the UK according to the Inland Revenue rules (that you have been habitually resident in the UK for 17 out of the last 20 years), then you are liable to declare all your worldwide property for taxation in the UK at 40%. Italian law would also require you to declare the property in Italy for taxation, before the heirs could register the property into their name. This potential double taxation is dealt with by the UK/Italy Double tax treaty, where, summarising a complicated law very simply, you should receive a credit against your UK tax of the Italian tax paid (this needs to be confirmed by a cross border tax specialist according to the facts of each particular case).
Dear Paul,Yes, your English will should be recognised in Italy after your death. You should check how your English will is drafted, whether it refers to "all my property worldwide" or simply "my estate". If it states "my property at ................." or "my property in the UK", then you definitely need to either update your English will or make an Italian will.In some cases it is advisable to have a separate Italian will, only dealing with the Italian property, perhaps in cases where there is a large amount of property spread over two or more different countries. This is more for practicality than anything, as if there is only one original will in existence, your heirs will not be able to deal with the Italian property until a sealed grant of probate, with a sworn translation and Apostille is brought to Italy. There then may be arguments over the law applicable to the succession....and so on.Charlotte Oliver
No it is not possible to jointly purchase property in this way in Italy. Spouses must purchase either in comunione dei beni (which dissolves on death) or separazione dei beni (which allows them to sell their respective share during their lifetime). Italian law on matrimonial property does not allow the property to pass automatically to the spouse after death. As you are moving permanently to Italy I would suggest making an Italian will in a bilingual version with an English speaking Italian Notary. You could choose to leave the Italian property to each other in your will, expressly stating that English or Australian law should apply to your succession, which would allow you the "freedom of testamentary disposition", which is a basic principle of common law countries. However, children of the previous marriage could potentially challenge this after their parent's death, and seek to argue (the very complex area of "ping pong" or renvoi) that Italian law should have applied to your Italian property. International lawyers hold different views on the likelihood of this succeeding and there is no definitive caselaw or precedent. My view is that any challenge is very remote and unlikely to succeed if brought in the Italian courts. If brought in the courts of the UK or Australia there is some chance a judge may rule Italian law should apply(which would allow the children to claim the value of half of the deceased's share of the property). You could avoid any future challenge by ensuring a fair disposistion between the children of your other worldwide property or assets. I hope this answers your queries, but without the full facts it is difficult to give a comprehensive answer. The area of private international law on succession in Europe is extremely complex and at the moment there are no definitive answers. Please see other posts on the proposed European Regulation. Given the three nationalities involved, and the existence of children from a previous marriage, I would suggest you seek expert legal advice on this. Charlotte
The UK and Ireland decided in December 2009 that they would not opt-in to the Commission's proposal for an EU Regulation on succession law, but will continue to participate in negotiations. The main point of the proposal is that the succession of a EU national should be governed by the law of their last habitual residence. Alternatively, a person will have the choice of expressly stating in their will that their national law should apply to their succession. The UK government is concerned mainly about the rules on “clawback” being applied to British nationals who die habitually resident in another member state where this system applies to lifetime gifts (for example in Italy, where any gifts or "donazioni" made by a person during his lifetime, which could include gifts into trust or to charities, are recalled into the estate on death to be redistributed amongst the heirs). Unfortunately this issue has already been seized on by the media and blown out of proportion (Daily Mail: British citizens could have their homes snatched from them on the orders of a European court under a new Brussels power grab!!!), even though a compromise or opt out of this particular clause of the Regulation could still be possible. The fact of the UK government remaining on the sidelines in this proposed Regulation is very worrying. British nationals (together with the Dutch and the Germans) are one of the biggest groups of Europeans, currently over 11 million moving to other member states of the EU (or buying property in other states), and the number of cross border successions are growing equally fast. Whether the UK opt-in eventually or not, this Regulation will affect British citizens in Italy who will need to ensure they have a will choosing English (or Scots) law as the applicable law, otherwise the rules of Italian law on forced heirship will apply to their estate. Charlotte Oliver
Comments posted
Dear Sarah, This would not necessarily be very complicated but could be quite costly. It will involve signing another deed of transfer with a Notary Public, and then the property could be registered in your sole name. The deed should preferably be in the form of a sale (with evidence of money changing hands ie a copy of a bank transfer which would be attached to the deed of transfer) rather than a donation. A donation could lead to difficulties with reselling in the future as in Italy any donations made are challengeable by heirs after the death of the donor, so are best avoided. You will need a Notary to advise you on the costs, which will involve their fee (onorario) plus the registration taxes (imposte di registro) which are calculated on the catastal value of the property. The purchase price of your brother's half need not be for the real market value but it should be at least the amount they orginally paid for their share. Both you brother and sister will need to sign the deed of transfer, although they can give power of attorney for this if they cannot come to Italy. Hoping this is helpful let us know if you need any more information to help you make a decision. Charlotte Oliver
I have worked with many different Notaries in all parts of Italy. They belong to a body called Consiglio Nazionale del Notariato which has a website with an English language version. Complaints against individual Notaries are not handled by the national body but the district council to which a particular Notary belongs. While Notaries are in the majority highly educated and very professional, there is no doubt that they do make mistakes which often go unnoticed in a deed of succession or purchase for many years and then are very costly to rectify. I notice that many deeds are drawn up by the Notary's assistant and then not property checked when they come to be signed. Notaries are not above the law and there is a large amount of caselaw in recent years on the level of responsibility and professional care they have to exercise. A declaration of succession should be a simple document but again requires careful preparation, calculation of catastal values of property, inheritance tax, and in particular the determination of heirs where a foreign law applies to the succession, which is not always straightforward. Alex can you tell us what the point of contention is? Charlotte
I do not agree that Italian succession law should apply to the succession of British nationals, although I agree there is a risk of this interpretation being made if a person dies intestate. To summarise very simply the current law on succession law in Italy for non-Italians: Art 46 of law 218/1995 states that "the succession is governed by the law of the nationality of that person" This means a British citizen's succession should be dealt with by the law of England and Wales/Scotland or Northern Ireland. But the word "law" means the whole law of that country and includes also the rules of conflict of law. English law may in turn send the issue back to Italy, stating that immoveable property should be dealt with by the law of the country where it is situated and moveable property should be dealt with by the law of a persons domicile (either domicile at birth or domicile of choice if domicile has been changed after the age of 18 with a clear intention to live in a new country permanently). Art. 13 of the Italian law 218/1995 says that Italy can accept the referral (known as renvoi) back to Italian law. BUT, and this is a very important BUT, I always advise British citizens that they may make a will in which they state they wish English law to deal with all aspects of their succession. This therefore allows them the choice (the "professio iuris") to make a will according to English law, ie leaving all their property to their spouse and not being bound to follow the Italian law of statutory shares. Although there is always a small risk that disgruntled heirs (ie the children) would make a challenge (depending on jurisdiction this could be in the courts of Italy or in the UK) saying the renvoi rule should apply regardless, this is a very small risk, and there is indication in caselaw of other countries that shows both an English or and Italian judge may reject the renvoi and uphold the right of a British national to leave his proeprty as he wishes according to his natural law (this Roman law principle is called "universality of succession"). The law is about to change dramatically. The new EU regulation on wills and succession (which will be in force from about 2012) will state that succession will follow the law of a person's habitual residence UNLESS they have made a will stating that they wish their national law to apply. I advise people to make a formal will with a Notary Public, and not risk keeping holographic wills which could be lost, destroyed or mis-interpreted later on. For the reaons above, making a will in Italy is most important in the case that you do not wish you succession to follow the Italian law on forced heirship. Charlotte
I only heard about the new forum last week, and reading this thread yesterday was curious to have a look....I spotted a few familiar names and had not realised where they had disappeared to. But I was quite shocked to read some of the content (this is probably giving the new site even more publicity!!), bad language, abusive to other members and the administrators (of Italymag) and just seems to be a competition for who can criticise Italymag with the wittiest post...nothing much relevant to life in Italy. I find it hard to understand such an acrimonious split over what should be a friendly information website. Am I wrong? Perhaps I should not even join in the debate here or encourage it, I think everyone has more important things to talk about... Charlotte Oliver
Hi Penny, If neither the parents are Italian, a child born in Italy does not automatically acquire Italian nationality, but can apply for it if resident in Italy up to age 18. I think your child will only be entitled to British nationality at birth. By the way, nationality has no bearing on liability for UK inheritance tax, unfortunately. Domicile is the issue here. Whether your property is taxable on your death in the UK or in Italy depends on your own, not the childs, domicile at the time of death. Charlotte
Hi Susan, I am not exhibiting am only visiting this year. Look forward to meeting you on Friday. Charlotte
Can members start new posts for new topics? I have tried to start a new post on UK domicile and IHT to cover Grania's question, but I keep getting an error message! If your UK will covers "all your property worldwide", and you are considered domiciled in the UK according to the Inland Revenue rules (that you have been habitually resident in the UK for 17 out of the last 20 years), then you are liable to declare all your worldwide property for taxation in the UK at 40%. Italian law would also require you to declare the property in Italy for taxation, before the heirs could register the property into their name. This potential double taxation is dealt with by the UK/Italy Double tax treaty, where, summarising a complicated law very simply, you should receive a credit against your UK tax of the Italian tax paid (this needs to be confirmed by a cross border tax specialist according to the facts of each particular case).
Dear Paul,Yes, your English will should be recognised in Italy after your death. You should check how your English will is drafted, whether it refers to "all my property worldwide" or simply "my estate". If it states "my property at ................." or "my property in the UK", then you definitely need to either update your English will or make an Italian will.In some cases it is advisable to have a separate Italian will, only dealing with the Italian property, perhaps in cases where there is a large amount of property spread over two or more different countries. This is more for practicality than anything, as if there is only one original will in existence, your heirs will not be able to deal with the Italian property until a sealed grant of probate, with a sworn translation and Apostille is brought to Italy. There then may be arguments over the law applicable to the succession....and so on.Charlotte Oliver
No it is not possible to jointly purchase property in this way in Italy. Spouses must purchase either in comunione dei beni (which dissolves on death) or separazione dei beni (which allows them to sell their respective share during their lifetime). Italian law on matrimonial property does not allow the property to pass automatically to the spouse after death. As you are moving permanently to Italy I would suggest making an Italian will in a bilingual version with an English speaking Italian Notary. You could choose to leave the Italian property to each other in your will, expressly stating that English or Australian law should apply to your succession, which would allow you the "freedom of testamentary disposition", which is a basic principle of common law countries. However, children of the previous marriage could potentially challenge this after their parent's death, and seek to argue (the very complex area of "ping pong" or renvoi) that Italian law should have applied to your Italian property. International lawyers hold different views on the likelihood of this succeeding and there is no definitive caselaw or precedent. My view is that any challenge is very remote and unlikely to succeed if brought in the Italian courts. If brought in the courts of the UK or Australia there is some chance a judge may rule Italian law should apply(which would allow the children to claim the value of half of the deceased's share of the property). You could avoid any future challenge by ensuring a fair disposistion between the children of your other worldwide property or assets. I hope this answers your queries, but without the full facts it is difficult to give a comprehensive answer. The area of private international law on succession in Europe is extremely complex and at the moment there are no definitive answers. Please see other posts on the proposed European Regulation. Given the three nationalities involved, and the existence of children from a previous marriage, I would suggest you seek expert legal advice on this. Charlotte
The UK and Ireland decided in December 2009 that they would not opt-in to the Commission's proposal for an EU Regulation on succession law, but will continue to participate in negotiations. The main point of the proposal is that the succession of a EU national should be governed by the law of their last habitual residence. Alternatively, a person will have the choice of expressly stating in their will that their national law should apply to their succession. The UK government is concerned mainly about the rules on “clawback” being applied to British nationals who die habitually resident in another member state where this system applies to lifetime gifts (for example in Italy, where any gifts or "donazioni" made by a person during his lifetime, which could include gifts into trust or to charities, are recalled into the estate on death to be redistributed amongst the heirs). Unfortunately this issue has already been seized on by the media and blown out of proportion (Daily Mail: British citizens could have their homes snatched from them on the orders of a European court under a new Brussels power grab!!!), even though a compromise or opt out of this particular clause of the Regulation could still be possible. The fact of the UK government remaining on the sidelines in this proposed Regulation is very worrying. British nationals (together with the Dutch and the Germans) are one of the biggest groups of Europeans, currently over 11 million moving to other member states of the EU (or buying property in other states), and the number of cross border successions are growing equally fast. Whether the UK opt-in eventually or not, this Regulation will affect British citizens in Italy who will need to ensure they have a will choosing English (or Scots) law as the applicable law, otherwise the rules of Italian law on forced heirship will apply to their estate. Charlotte Oliver