Challenges in Dealing with International Estates: A Guide for Lawyers

Navigating the complexities of an international estate with Scottish assets can present a unique set of challenges for lawyers advising on succession to private wealth. From distinguishing between succession law and tax law to managing cash flow and dealing with double taxation, there are several key considerations to keep in mind.

One major issue that may arise is the need to distinguish between succession law and tax law when dealing with an international estate. It is not uncommon for there to be multiple wills in place, each governing succession to assets in different jurisdictions. It is important to ensure that both wills are considered side by side to handle succession to relevant assets appropriately, while also keeping in mind the tax treatment of the estate, which follows the deceased’s domicile.

Accessing funds in a timely manner to settle any tax due to HMRC can also be a challenge in international estates where inheritance tax is payable. It is crucial to plan ahead and agree on a strategy to settle tax and liabilities as early as possible, especially when dealing with different executors and beneficiaries in various jurisdictions.

Furthermore, the issue of double taxation may arise, with both the UK and foreign states imposing their own taxes on assets. While there are double tax treaties in place to address this issue, it is essential to consider the specific terms of these treaties and weigh the benefits of claiming relief against the costs involved.

In terms of the court process, there may be a need to apply for grant of confirmation in the Scottish courts, which cannot grant confirmation to foreign estate. This may require involvement of courts in the jurisdiction where the foreign assets are located, potentially leading to additional paperwork and delays in the administration of the estate.

Overall, managing client expectations and navigating the various challenges that may arise in the administration of an international estate with Scottish assets requires a thorough understanding of succession and tax laws, as well as effective communication and coordination with foreign lawyers, tax advisers, and courts. By staying informed and proactive, lawyers can ensure a smooth and efficient process for their clients during what can be a complex and emotionally challenging time.