Inheritance tax laws different overseas, investors beware

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by Kay Murchie

Over 800,000 Britons are purchasing property overseas with 31% seeing it as their pension. Many countries are experiencing considerable growth in property prices so owning a property abroad may greatly increase your exposure to inheritance tax.

In addition, wills made in the UK may not be sufficient to cover overseas property, warns Geoffrey Shindler at Lane-Smith & Shindler LLP who specialises in trusts, inheritance tax, capital gains tax and wills.

Mr Shindler said popular destinations for Britons to purchase property are Dubai, France, South Africa and Spain but inheritance laws are drastically different to those in Britain.

He added that investing in overseas property can provide a good return and it is a growing trend. However, the property becomes part of your worldwide estate so local laws regarding inheritance must be taken into account.

It is advised that those looking to invest overseas obtain local advice and consider using a foreign will to deal with your property. Furthermore, your solicitor in the UK may be able to find you a suitably qualified local lawyer, particularly if you want your overseas property to be your retirement home.

Over the last 10 years, property has been a good investment for many. In Spain, house prices have risen at a much faster rate than the UK. Experts say that overseas property is still a good investment if you buy wisely in the right location.