I would welcome members’ comments on what would be the result of purporting to give a usufruct over English movables. Would the legacy simply be void? Or would it perhaps take effect in the closest possible form - some form of lease for life?
I am dealing with a French donation which is valid under 1963 Wills Act and governs the worldwide estate including English movables (there are no English immovables). Testator was French domiciled (according to both English and French law) at the time of death.
I have experience advising on the UK tax treatment of usufructs in relation to foreign assets held by UK residents, but would welcome views on the validity of such legacies where English assets are concerned. Thanks in advance
I recall a conversation some years ago with a (QC) now a KC , who confirmed that in theory there is no prohibition of such an estate or interest in movables under the Law of Property Act 1925 or thereafter.
S. 1 LPA in relation to equitable estates in land is the main HMRC argument therefore only “available” assuming a trust - which is fallacious.
You may not need to invoke “a lease for life”, if you wish to remain outside the settlement provisions.
I daresay there will be other comments which will be forthcoming.
Many thanks Peter. This is an interesting view - whilst I am reasonably familiar with the arguments made on both sides as to the IHT issues, I had always taken it for granted that a usufruct cannot be recognised under English property law as taking direct effect per se over English assets, so thought it must either be a case of finding the nearest English equivalent or else as void.
The question is how to actually apply the nue-propriété / usufruit dismemberment to a British situs ‘movable’. It depends on the wording of the will, on the type of ‘movable’ or personality / chattel and on whether and how possession and enjoyment can be allocated and/or divided over it. The Oxford legal dictionary does provide an English translation of the term which may be inferred as providing a sufficient and adequate definition at law.
If you wish to discuss it in the context of succession to an English estate of a non-domiciliary, give me a call.
Peter.