One small step for planning, one giant leap for cross-border estates

The Artemis II mission offers a pertinent analogy: success does not depend on immediate results, but on rigorous preparation, system-testing, anticipating potential failures and laying the foundations for a far more complex mission ahead.

In this article, avocate Sharon E Wilson-Dutin explains how cross-border succession planning works the same way and why the interaction between legal systems, tax regimes and administrative processes require a strategic, long-term approach.

The contrast between the system in England and Wales and France illustrates how a single estate plan can produce divergent outcomes.

In England and Wales, testamentary freedom gives individuals broad discretion in choosing the beneficiaries of their estate whereas in France, the law protects certain heirs, notably one’s children, by imposing “forced heirship”, thus limiting how much you can freely leave to others.

Consequently, a simple English Will in which the testator leaves everything to the surviving spouse may not be fully effective in France, especially where French immovable property is concerned (such as a holiday home).

In England and Wales, it is the estate that is subject to inheritance tax, often allowing tax-free transfers between spouses. In France however, inheritance tax applies to each beneficiary and any allowance and the rate of tax, is determined by the degree of the relationship between the deceased and the beneficiary. 

Although a Double-tax Treaty exists between France and the U.K., the process of obtaining a tax credit for excess tax paid in one of the two countries can be slow, leaving families with unexpected financial pressures.

On April 6 2025, the IHT regime moved from a domicile-based system to a residence-based one. This is marks a significant change for internationally mobile individuals. 

Under the previous rules, the estate of anyone who was domiciled in England and Wales, or  deemed domiciled, because they had been a UK tax resident for more than 15 out of the last 20 years, would be subject to UK inheritance tax on their worldwide assets.

Since 6 April 2025 “long-term residence” has replaced the previous domicile and deemed domicile rules. Under the new rules, an individual is deemed a “long-term UK resident” for IHT purposes, if they have been resident in the U.K. for at least 10 out of the 20 tax years preceding the tax year in which the chargeable event (notably death) arises.

The difference is clear:

• The U.K. long-term resident is taxed on their worldwide assets
• The non-U.K. long-term resident is taxed only on their U.K. assets.

However, even after leaving the U.K., the exposure to IHT can continue for up to ten years. This is called the “IHT tax tail”. Thus, for international families, the U.K. tax rules may still apply long after they move to another country. Where there is a double-tax treaty, these rules may be overridden, so it is important to take specialist advice.

The interaction of different legal and tax systems can create significant challenges for individuals and families dealing with cross-border estates. Forced heirship rules may result in unintended beneficiaries inheriting assets, while differing tax regimes can trigger immediate liabilities for those receiving an inheritance. At the same time, navigating multiple jurisdictions can lead to delays in estate administration, as differing processes and requirements must be reconciled. These complexities often give rise to conflicting legal and tax obligations, adding further strain to an already intricate situation.

As demonstrated by Artemis II, long-term success depends on early preparation, system-testing and coordinated execution. Cross-border succession planning requires the same approach. Understanding how legal and tax regimes interact, notably in England and Wales and France, allows individuals to properly structure their estate and thereby protect their families and ensure that their wishes are respected.

In conclusion: plan early, plan globally and plan for the journey not just the destination.

If you have any queries about cross-border succession, please do not hesitate to contact our private client team.

Sharon E. Wilson-Dutin is a French-qualified Avocat in the private client and French law teams. She advises on French Succession and Property laws, Estate Administration, French  Property transactions, Estate planning, Gifting and Succession and Property litigation.