United Kingdom Estate Planning summary

UK Estate Planning, UK Family Law and UK Private International Law issues are summarized below:

1. Estate Taxation in the United Kingdom

i. Lifetime gifts
There is no gift tax in the UK regarding gifts made more than seven years before death. Gifts mde in th seven years before death are subject to taper relief to inheritance tax. In certain cases gifts into a trust are liable to inheritance tax as ‘immediately chargeable transfers’.

ii. Inheritance
Inheritance tax is payable by reference to an individual’s domicile and the situs of assets. UK-domiciled individuals are subject to inheritance tax on their assets worldwide. On the other hand, in general terms, non-UK domiciled individuals are only liable to inheritance tax on their UK situs assets as non-UK situs assets are treated as excluded property for inheritance tax purposes.

iii. Wealth tax
There is no wealth tax in the United Kingdom.

2. Succession Planning in the United Kingdom
i. Applicable law
In England and Wales, the law of the place where the property is situated governs the distribution of immovable property. Movable property is governed by the law of domicile of the individual. For reasons of space we have not considered Scottish PIL (Private International Law) issues which may differ to those of England & Wales.

ii. Wills in the United Kingdom
In the UK it is possible to organize the transmission of your estate through a Will with specific rules to respect.

iii. Restrictions on freedom of disposition
Individuals have complete freedom of disposition over their estate. There is no system of forced heirship. However, the estate of an individual  domiciled in England and Wales at the date of  death, can  be subject to a claim by an individual who was maintained or otherwise supported  by the deceased.

3. Trusts and Foundations in the United Kingdom
Trusts are recognized by and may be established under the law of England and Wales.
Trusts established under the laws of other jurisdictions are recognized in England and Wales both under the general law and under the Hague Convention on the Law Applicable to Trusts and on their Recognition, 1 July 1985, which is applicable in the UK.

There is no specific law of private foundations in England and Wales. Under the general law, foundations governed by the laws of other jurisdictions may be recognized by the Courts of England and Wales and they are likely to be treated according to whether their characteristics are most closely aligned to companies or trusts.

4. Matrimonial Issues in the United Kingdom 
English law does not contain a matrimonial property regime. The property rights of spouses are generally governed by the same property law that applies to other individuals. However English Private International Law recognises the validity of marital property regimes under the law of the couple’s domicile at the time of the marriage.

Civil partnerships are recognised in the UK under the Civil Partnership Act 2004.  This provides for same-sex couples to form a legally recognized civil partnership.

Following the introduction of the Marriage (Same-Sex Couples) Act 2013, same-sex couples have been able to marry.

The courts of England and Wales will only apply English law in relation to divorce.

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Please contact your local Rosemont office for assistance at consulting@rosemont.mc