Planning wills and estates in the UK

Wills in the UK, as in other countries, offer a way for people to make their final wishes known while easing the inheritance process for their heirs. Without these essential documents, local inheritance law determines how any legacy is divided. With different laws in each of the UK’s constituent countries, it makes sense to consider writing and registering a will.

This expert guide explains why the importance of wills for expats living in the UK. It covers the following topics:

Wills and estates in the UK

Less than half of resident adults (45%) had enacted wills in the UK as of 2019, according to an independent survey of over 2,000 people. Many respondents in the King’s Court Trust review said they did not have enough information to enable them to write a will. However, without enacting wills in the UK, any estates left behind are divided according to UK inheritance law. Such rules may not always be in accordance with one’s wishes; for instance, unmarried partners are not entitled to the share of any estate.

A will, therefore, lets you decide what happens to your money, property, and other possessions after your death. Making a will also ensures that your estate doesn’t pay more inheritance tax than required. Thankfully, it’s fairly straightforward to draw up a will in the UK. You can choose to write your own will, or you can seek help from your solicitor, certain charities, or online will writing platforms.

Inheritance law in the UK

As an expat foreigner living or retired in the UK or as someone who owns property in the UK, UK inheritance law will affect any estate you leave behind. For residents, the law applies to all your worldwide movable assets; as a non-resident with some UK property, British inheritance law and inheritance tax will affect at least some of your estate.

Inheritance laws vary across the UK’s constituent nations. In England and Wales, there is no forced heirship and people are free to leave their property to whomever they wish by making a last will and testament in the UK. In Scotland, however, a surviving spouse and children have a statutory claim to parts of the estate.

Inheritance law on pensions in the UK

In general, UK rules allow anyone to inherit your pension upon your death. However, the way you take your pension influences how you can leave it to someone else when you die.

In most cases, your heir pays no tax if you die before the age of 75 years. Should you die after that, your heir will need to pay income tax on an inherited pension. Additional tax may fall due if pension withdrawals plus any estate you leave behind is more than £1,073,000.

Applicable foreign inheritance laws in the UK

The UK is one of three countries (along with Denmark and Ireland) that opted out of changes to EU inheritance regulations in 2015, which give citizens living abroad in the EU the choice to have their estate dealt with according to the laws of their home country or country of residence. This means that UK citizens living in other EU countries covered by these regulations will have this choice.

Additionally, if a foreign resident dies without leaving a will or any official declaration of which law they want to apply, then the law of the country they’ve lived in for the last five years will apply – in this case, the UK.

Furthermore, since the UK opted to leave the EU in 2016, new legislation may affect these rules, so think about seeking legal counsel before making any decisions.

Rejecting assets and contesting wills in the UK

While receiving an inheritance can be a welcome event, tax or other consequences may cause heirs to refuse or disclaim such a bequest.

There are two methods of refusing an inheritance: variations and disclaimers. While the latter are simple documents where the beneficiary gives up all rights to their inheritance, the former allows the original beneficiary to choose who inherits. To be effective for tax purposes, both must be in writing and executed within two years of the date of death.

Contesting wills in the UK can be a complex and confusing process. In England, in particular, the law emphasizes the importance of respecting the wishes of the deceased – even if such wishes are contrary to family expectations. As such, an odd distribution of the estate isn’t normally grounds for challenging a will.

To successfully enter a plea to contest wills in the UK, interested parties must meet several conditions. These include the legal right and a valid reason to contest the will, evidence in your favor, and filing a contest within the time limit (often as little as six months after the grant of probate).

The main grounds for contesting wills in the UK are as follows:

• Lack of testamentary capacity;
• Undue influence or coercion;
• Lack of knowledge and approval;
• Wills Act 1837;
• Forgery and fraud

Consult a solicitor for more information on rejecting an inheritance or contesting a will.

Inheritance law in the UK if there is no will

When expats or those with property within the UK die without leaving a will, intestacy law determines how their estate is distributed and what UK inheritance tax is to be paid. Such laws are different in England and Wales than they are in Scotland or Northern Ireland.

Unclaimed inheritance in the UK

If an inheritance is unclaimed in the UK, if there are no legal heirs or the inheritance is rejected by all beneficiaries, then the estate passes to the crown as ownerless property (or bona vacantia). However, it is possible to make a claim on the estate if you feel you’re entitled to a share. People who are eligible to claim a share must be entitled relatives. Those who are not related to the deceased, such as a live-in partner or a carer, can apply for a grant from the estate.

Gifts before death

In some cases, it may be advantageous to give away a portion of your property – such as money, real estate or other possessions – within your lifetime. Nonetheless, it is worth acquainting yourself with the UK’s tiered system of gift tax.

In general, gifts made during the last seven years of life are subject to UK inheritance tax, although any gifts made three to seven years before death are taxed at rates between 8% to 40% if they are worth more than £325,000. A number of UK gift tax exemptions apply.

Read our guide to inheritance in the UK.

Wills in the UK

Expat residents are not required to draw up wills in the UK. However, it is advisable to do so if you want to instruct how your assets are dealt with in the event of your death.

If you are a foreign resident you are entitled to write a will in your own country, which will be recognized by UK authorities as long as it is legally valid, although there will be additional costs if you have to translate the will into English as well as possible time delays.

You can also have two wills – a UK will and one made in your home country – as long as one doesn’t accidentally revoke or negate the other. If you are thinking of doing this, it is a good idea to consult a solicitor experienced in UK inheritance law for foreigners and locate a UK solicitor dealing in UK inheritance law.

Joint wills drawn up with spouses or partners are permitted in the UK.

How to write a will in the UK

There aren’t standard types of UK will, so you can write your own. However, it is advisable to consult a solicitor if your estate isn’t fairly small and straightforward. Alternatively, you may want to simplify things by using an online will-writing platform.

However you create your UK will, it should include:

• Details of how your assets are to be distributed;
• Information on who should look after any surviving minor children;
• Who will be the executor of your estate;
• Details of what should happen if beneficiaries die before you;
• Your full name, date, and location;
• Your signature in front of two witnesses aged over 18;
• The signatures of the witnesses, made in your presence.

You can change your UK will or make a new one at any time, although you need to follow the correct procedures. Changes need to be done by codicil, which is an official alteration that is signed and witnessed. If you make a new UK will, you need to destroy the old one and explain in the new will that previous wills are revoked.

In certain circumstances, UK wills can be changed after a person’s death. This can only occur if all beneficiaries left worse off by the changes formally agree, and it must be done within two years of the death. Changes to UK wills can be done to:

• Reduce inheritance tax or capital gains tax payable;
• Provide for someone left out of the will;
• Move assets into a trust;
• Clear up any ambiguity in the will.

You can consult the British government’s website to find out how to make a will on behalf of someone else if they have reduced mental capacity due to illness or injury can be found, or explore their selection of will templates.

Executing a will and grant of probate in the UK

When a UK resident dies, their next of kin (for example, their spouse or children) must apply for the legal right to deal with their estate. This is called applying for probate.

In England, Wales, and Northern Ireland, the court will award a grant of probate within about four weeks if the person left a will; without a will, letters of administration are issued instead. In Scotland, this process is called applying for confirmation. You can apply for such a grant online (IHT 421 or PA1). You will be required to provide a number of documents, such as the will itself and any codicils, certificates of birth, death and marriage or partnership as applicable.

In some cases, you will not be required to get a UK probate to transfer assets (for example, if the deceased left less than £10,000 or all assets automatically go to a spouse under co-ownership).

Once you have probate, you may deal with someone’s estate, or you can hire a solicitor to help. Some of an executor’s main duties are as follows:

• Calculating and paying inheritance tax
• Paying off debts and outstanding taxes
• Selling property in the UK, shares and other assets
• Distributing the estate

Getting your estate valued in the UK

Valuing an estate may range from six to nine months – or longer for estates where inheritance tax is payable. As such, expats may want to put their affairs when executing wills in the UK so as to ensure a smooth transfer of assets to their heirs.

While you do not need an accountant to value the estate, it is advisable to get a professional estimate, particularly if you have different kinds of assets. These may include property, cash in onshore and offshore bank accounts, life insurance policies, cars, jewelry, and other items such as art and furniture. Debts such as outstanding loans, maintenance payments, and hospital and funeral bills are also part of an estate.

Inheritance tax in the UK

Inheritance tax in the UK is a flat 40% and becomes payable on the worldwide assets of someone who was a UK resident and on UK property of someone who lived overseas. The net value of the estate determines what inheritance tax needs to be paid. The executor of the will or the person administering the estate must fulfill inheritance tax obligations before it is handed down (unless there aren’t sufficient funds). Therefore, beneficiaries typically don’t pay UK inheritance tax from their own savings.

Overall, estates valued under a threshold of £325,000 do not attract inheritance tax. This threshold rises in certain situations. For example, if you leave your home to your children or grandchildren in the tax year 2020-21, an additional £175,000 is free of inheritance tax.

The UK also has tax treaties with several countries to avoid double taxation.

Tips on planning your estate in the UK

Here are a few points to consider for those planning their estates or writing wills in the UK:

• Consult a solicitor: A solicitor or tax attorney can advise you on the best way to protect your legacy for your heirs – particularly if you live in different countries. Financial advisor comparison site Unbiased can help you find the right professional for you.
• Power of attorney: By executing a power of attorney, you can nominate someone to make legal decisions on your behalf if you are no longer able to do so. You can create more than one such document and delineate the extent to which you want them to act for you.
• Gifts in your lifetime: You may be able to spare your heirs some of the complexities of dealing with your estate by making gifts within your lifetime. It’s worth noting that the UK taxes recipients on the value of any gifts they may have received within seven years of the giver’s death.

Useful resources

The following websites may prove useful for expats looking for information on wills in the UK:

• UK government information on wills, inheritance law, and taxes
• Solicitors in the UK
• Find a registered will or probate
• UK national will register
• Money Advice Service UK