The very wealthy are able to make trusts and foundations to hold overseas assets and control ownerships when people die, these same rules are available to everyone and using them can avoid expensive and lengthy probate costs.
ProACT Partnership who made the position clear were established in 2002 by Birmingham solicitor Gareth Fatchett & Sam Orgill in Cyprus to offer UK standards of legal and financial expatriate advice for family and business, living abroad and buying overseas property and offer advice on a wide range of matters including tax and wills.
Sam Orgill, MD says,” You need to look forward and plan how you want your assets and your family’s security protected against unnecessary expenses, delays and distress at a difficult time when someone dies or is incapacitated through illness. We look at every case independently as each family’s Will or Trust, is dependant on the type and amount of their assets and even more importantly, family values.”
Cyprus lawyers can charge, by law, a fixed amount for Probate work, typically in excess of 12% of the estate value. That is a whopping 12,000 euros for every 100,000 euros of worldwide property and investment assets, a very expensive exercise which could be avoided by planning ahead.
If you die without a Will with Cyprus assets, the courts will appoint a solicitor who will charge the full Probate cost. Another concern arises if you do not have a Will and the children inherit, the children could simply sign affidavits to “give up” their rights to inherit in favour of the spouse, this only adds additional expense and delay to death intestate. But, the children could refuse to hand over the assets to the spouse and there is nothing can be done to force them.
Solutions
There is no UK or Cyprus Inheritance Tax on first death between UK domiciled married couples. They can transfer twice the Nil Rate Band on second death £624,000 without Inheritance Tax but Cyprus real estate property and land, motor vehicles and business still need probate. Using family members can avoid “fixed” solicitor’s costs.
Sometimes separate Wills for separate jurisdictions can settle assets in different countries, reducing Inheritance Tax and delays in Probate – currently two years plus in Cyprus.
TRUST
One can also look at a “Trust” which is in effect a “living Will” where you give your personal assets to a new legal entity called a Trust. Subject to tax rules you can continue to have an element of direct and control these assets and have a Trust Will to provide for the distribution of assets on death.
Trusts can be a good way of avoiding tax on family assets down the generations, avoiding children acquiring their own Savings and Inheritance Tax liabilities. Trusts also avoid Investment and Savings being frozen on death pending the settlement of Probate with an average of 9 months in the UK.
Added Sam, “The option to “give it away”, during your life time – which is not as silly as it sounds allows the family to control the distribution of assets and inheritance without the delay and expense of Probate.
The important thing to remember is that you have spent your lifetime securing financial protection; with one astute act you can ensure continuance of that for your family. Seeking professional advisors fully conversant with the expatriate laws in Cyprus can protect your family’s future and your peace of mind”.
ProACT Partnership
00 357 26 819 424
www.proactpartnership.com
Property in Cyprus
