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In an increasingly globalised world, where people live, work and build wealth across borders, cross-border inheritance cases are becoming more and more common. A particularly interesting case is German-British inheritance, which has become more complex as a result of the Brexit referendum and the resulting changes in the relationship between the United Kingdom and the European Union. This article highlights the challenges and considerations associated with inheritance cases between Germany and the United Kingdom.
International inheritance law is characterised by a multitude of regulations that determine which national inheritance law applies. Before Brexit, the EU Succession Regulation (EU Succession Regulation) was also relevant for the United Kingdom, although it never formally acceded to it. With its withdrawal from the EU, the United Kingdom now has the status of a third country, which changes the legal situation.In cases of inheritance involving Germany and the United Kingdom, it must be clarified which national law applies to the inheritance. In principle, this depends on the last habitual residence of the deceased. If the deceased had their habitual residence in Germany, German inheritance law generally applies; if they had their habitual residence in the United Kingdom, British inheritance law applies.
The differences in inheritance law between Germany and the United Kingdom should not be underestimated. While German law recognises the principle of the community of heirs and provides for statutory inheritance claims such as the compulsory portion, British inheritance law follows the principle of freedom of testamentary disposition with extensive freedom of choice for the testator.
Tax aspects play a central role, in particular the avoidance of double taxation in the event of inheritance. Although there is a double taxation agreement between Germany and the United Kingdom, it does not specifically deal with inheritance tax. This can lead to complex tax issues, especially if assets are located in both countries.
Those affected should set the course early on and review both their last will and testament and their tax planning for cross-border aspects. Forward-looking planning can help to secure the rights of the heirs and minimise the tax burden.
German-British inheritance cases present special challenges for those involved, but also offer opportunities for structuring. Given the complexity of international inheritance and tax law, expert advice is essential to best protect the interests of the testator and heirs.