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Overseas Property

Also known as: Foreign Property, International Property

Definition

Overseas property is land or buildings you own in another country, which is typically governed by that country's inheritance laws rather than UK law when you die.

Understanding how overseas property works in your estate is crucial because it creates unique cross-border complications involving foreign succession laws, multiple probate processes, and potential double taxation.

What Does Overseas Property Mean?

Overseas property refers to immovable property—land and buildings—located outside the United Kingdom. Under UK private international law, such property is governed by lex situs (the law of the country where it's situated). This fundamental principle, confirmed by the UK Supreme Court in Kireeva v Bedzhamov [2024], means foreign inheritance laws apply to your overseas property regardless of what your UK will says.

While a UK will can include overseas property, practical complications arise. Your executors need separate grants of probate in each jurisdiction. Sarah owns a Marbella apartment worth £220,000 and included it in her UK will. When she dies, her executors need both UK probate and Spanish probate (declaración de herederos), requiring certified translations, local lawyers, and typically 12-18 months—delaying the entire estate.

If you're UK-domiciled or a long-term UK resident under April 2025 rules, your worldwide assets including overseas property face UK inheritance tax. The Inheritance Tax Act 1984 applies IHT on global estates above £325,000. The property's country may also charge inheritance taxes, creating dual taxation risk—though relief may be available through tax treaties.

Many civil law countries including France, Spain, and Portugal have forced heirship rules that override UK will provisions. Under Spanish law, two-thirds must pass to your descendants. David's UK will leaves everything to his wife, including a £350,000 French villa. French forced heirship gives his two children a reserved portion (two-thirds collectively), overriding his UK will and creating unexpected IHT liability and family conflict.

Common Questions

"Do I need a separate will for overseas property I own?" Not necessarily, but it's often recommended. While a UK will can cover overseas property, creating a separate will for each jurisdiction ensures compliance with local laws and can significantly speed up the probate process. This is especially important in countries with forced heirship rules like France or Spain.

"Will my UK executor be able to deal with my overseas property?" Your UK executor can apply for probate on overseas property, but they'll likely need to work with local lawyers in that country. Many jurisdictions require a separate grant of probate under local law, which can add months to estate administration and increase costs significantly.

"Is overseas property subject to UK inheritance tax?" If you're UK-domiciled, yes—your worldwide assets including overseas property are subject to UK inheritance tax above the £325,000 threshold. You may also face inheritance tax in the country where the property is located, though double taxation relief may be available through treaties between the UK and that country.

Common Misconceptions

Myth: If I own property in Spain, it's not subject to UK inheritance tax

Reality: If you're UK-domiciled or a long-term UK resident, your worldwide assets—including Spanish property—are subject to UK inheritance tax. Your estate may also face Spanish inheritance tax, though relief is available through the UK-Spain tax treaty.

Myth: My UK will automatically works in other countries

Reality: The foreign country applies its own succession laws to property located there, which may override your UK will's provisions—especially in countries with forced heirship rules requiring portions to pass to children or family members.

  • Foreign Assets: The broader category of all overseas holdings, with overseas property being immovable foreign assets requiring distinct treatment.
  • Immovable Property: The legal classification determining overseas property is governed by lex situs rather than UK law.
  • International Will: A specialized will designed to be valid across multiple jurisdictions under the UNIDROIT Convention.
  • Forced Heirship: Civil law rules in France and Spain requiring reserved portions for family members, overriding UK will provisions.
  • Dual Taxation: When both UK and foreign countries charge inheritance tax on the same property.

Need Help with Your Will?

If you own overseas property, understanding how it fits into your estate plan is essential to avoid probate delays, unexpected tax bills, and conflicts with foreign inheritance laws. Your UK will needs careful drafting to work alongside international property ownership.

Create your will with confidence using WUHLD's guided platform. For just £99.99, you'll get your complete, legally binding will plus three expert guides. Preview your will free before paying anything—no credit card required.

Legal Disclaimer:

This article provides general information only and does not constitute legal or financial advice. WUHLD is not a law firm and does not provide legal advice. Laws and guidance change and their application depends on your circumstances. For advice about your situation, consult a qualified solicitor or regulated professional. Unless stated otherwise, information relates to England and Wales.