Forced heirship - Venezuela

(shantidpalmer) #1

I have a client who wishes to make a Will here in E&W. He is domiciled in
Venezuela, but resident in the UK for the next few years on a work
contract. He has made it clear he wishes to return to Venezuela where he
owns a residence with his wife. He has some investments and business
shares (no controlling holding) in America, Spain, UK and one of the
Caribbean Islands.

I have done some research and note that Venezuela is subject to the forced
heirship regime and 50% of net estate must pass to Descendants, Ascendants
and spouse but it’s not clear to me if the client can leave all to spouse
and then on death of spouse to children or does the 50% have to be equally
split between Spouse, children, parents, grandparents etc.?

I also understand that Inheritance tax would only need to be paid on the
Venezuela assets and any further IHT would be governed by the country in
which the assets exist. It is also my understanding that a English will
would be recognised in Venezuela and could be admitted to probate etc. On
this basis, would an English will to cover the succession of all global
assets suffice or does anyone see any major problems with this? The client
seems comfortable with the issues/cost involved in relation to the
appointment of overseas attorneys/translation of documents etc.

I would appreciate forum members thoughts on this.

With thanks

Shanti Palmer
SP Wills

(jgarriga) #2

Take all that I could say with a grain of salt, as I am licensed in Spain and my knowledge of the Venezuelan law is not that good. However I had clients who also needed to take care of inheritances with assets there.

As far as I recall the spouse and decendants exclude ascendants. When the spouse concurs with decendants she has an equal share to one of them. ( one son would be 50%/50%, two would be 33%,33%,33%). Take a look at the recent changes, I heard decendants got a bigger share.

A particular pain of forced heirships is that the applicable share should be determined at the moment of the decease and a country like Venezuela does not bring legitimate confidence to the table. If they rise or just alter the shares in the meantime it could be a mess.

Personally I would take advantage of the possibility to have a copycat will filed at the Venezuelan Consulate in accordance with their national law. You shouldn’t have big translation costs and there would be no danger of a last minute regulatory change making the will void.

In the tax department the SENIAT (the Venezuelan tax man) leaves a lot to be desired. The idea of countries taxing just the “national assets” tends to float and the Art. 2 of their IHT law seems to follow the concept. However Art. 5 has a reference to “center of interests” which may cause some confusion. If the case does not rest crystal clear the last paragraph is obviously useless as there wouldn’t be a DTT good enough to hide behind.

Anyway another aspect to take into account is the possibility of any tax over the transfer of inmovables. As you will have to split the community of property (unless they are under separation of property or another marriage economic arrangement) there is a chance to avoid some taxable events and also to get tax deductions depending on the status of the assets and of the forced heirs.

Jose Garriga

Jose Garriga Abogados