French holiday home and the RNRB

Trusts Discussion
1

H and W jointly own a French house. H dies in September with no French Will, so a quarter of the house goes to adult children. The uk assets go W.

As the RNRB comes off first, it appears H’s RNRB will have been used up and part of his NRB. This is a pity, as if H’s half of the house had gone to W, the RNRB on her death is likely to be much higher.

W and children could do a DOV, but this would mean making a gift in France of a quarter of the house, which I assume would have tax consequences there. Can the children waive their forced heirship rights without tax consequences?

H made a pre August 2015 uk Will leaving all his uk assets to W. Could this be interpreted as an implied election for uk law to apply, soH’s half of the house will pass under the uk intestacy rules? Has anyone successfully argued this in France?

Simon Northcott

2

Not sure that your analysis of the effect of Regulation (EU) n° 650/2012 is the most propitious.

If the House is in the Nantes Cridon area, the notary will have told you that the renvoi in this case is applicable. Other Cridon’s have not taken that position. The Cridon is, put bluntly, acting out of its jurisdiction in making the assumption that an English renvoi actually applies in this case under article 34, which needs to be read carefully.

As English law enables the vesting by direct seisin of land in the heirs even on intestacy outside the jurisdiction of the LPA consolidation, the English intestacy laws can be called in aid to vest the property directly in those entitled on intestacy.

If you read the Regulation correctly, English law does not require a renvoi to transfer the property as it has a different rule for land outside the Jurisdiction: see Dicey and Megarry concerning the Real Representatives Law 1897, in which they are both quire clear that the requirement for a personal representative only applies to English land.

If you wish English intestacy rules to apply, on order to better marshal the advantage if the spousal exemption, then I suggest you contact me. You may be able to avoid having to do a variation, and therefore the unnecessary French gift. It will require a Barrister’s opinion in French, which I can supply. The French cannot gainsay it, as there is no renvoi under English law in this case,and the Cridon cannot assume that there is.

The intestacy will probably mean that unless there was an option for English law as that of the nationality or assimilated somewhere else in the English will, the law of the habitual residence will apply, but that, contrary to the Edict of Nantes, or at least its Cridon, does not change the renvoi position at all.

I do not propose to go into a discussion on the Forum on this point. It has worked, and I see no point in explaining how and why

Peter Harris
www.overseaschambers.com