In an increasingly mobile world, it is common for individuals and families to hold assets, business interests and personal ties in more than one country. For those with Scottish connections, whether a Scottish domiciliary who owns property or investments abroad, or a non-UK national who holds assets in the UK, effective estate planning depends on coordinating the rules of more than one legal system. Without careful planning, an estate can be exposed to conflicting succession laws, unexpected tax charges and a prolonged, costly administration process.
Why domicile matters
Domicile is key consideration of cross-border estate planning. Broadly, an individual acquires a domicile of origin at birth, which continues unless displaced by a domicile of choice acquired by settling permanently in another country. Domicile determines which country’s law governs the succession to a person’s moveable estate (such as cash, shares and personal possessions). Establishing where a person is domiciled is therefore one of the first questions in any international estate plan, and it is not always straightforward for globally mobile clients.
The Scots law of succession
Scotland has its own distinct law of succession, which differs markedly from that of England and Wales and from many other jurisdictions. A key feature is the concept of “legal rights”, which entitle a surviving spouse or civil partner and children to a fixed share of the deceased’s moveable estate, regardless of the terms of any will. These protected entitlements cannot be defeated simply by leaving assets elsewhere in a will, and they can produce outcomes that clients do not expect or want. Those with a Scottish domicile should understand how legal rights may interact with their overall plan.
Succession across jurisdictions
Where assets are spread across borders, different rules can apply to different parts of the estate. As a general principle, the succession to immoveable property (land and buildings) is governed by the law of the country where the asset is located, while moveable property is governed by the law of the deceased’s domicile. Many civil law countries also impose “forced heirship” rules, which reserve fixed shares of an estate for certain relatives. In addition, the EU Succession Regulation (often called “Brussels IV”) allows individuals connected with participating EU states to elect for the law of their nationality to govern their succession — a useful planning tool for those with assets in Europe, even though the UK itself did not opt in.
Inheritance tax and the shift to residence
UK Inheritance Tax has historically applied to the worldwide assets of those domiciled or deemed domiciled in the UK, and to UK-situated assets of everyone else. From April 2025, the UK moved away from domicile towards a residence-based system, under which long-term UK residence determines exposure to Inheritance Tax on worldwide assets. This is a significant change for internationally mobile individuals and existing “non-doms”, and plans put in place under the previous rules should be reviewed. Non-UK nationals who own UK assets — particularly UK residential property — should be aware that those assets can remain within the scope of UK Inheritance Tax regardless of where the owner lives. Double taxation is a further risk where more than one country seeks to tax the same assets, although relief may be available under estate tax treaties or through unilateral credits.
Practical steps to protect your wealth
Coordinated, cross-border advice is essential. Individuals with assets in more than one country should consider whether separate wills are appropriate for each jurisdiction, drafted so that they work together rather than inadvertently revoking one another. Trusts and other structures may assist with succession and tax planning, but their treatment, particularly in relation to taxes, can vary widely between countries and must be checked in each relevant jurisdiction. Above all, an international estate plan should be reviewed regularly, and particularly after any move, change in family circumstances, acquisition of foreign assets or change in the law.
Protecting wealth across borders is achievable, but it requires a clear understanding of how different legal and tax systems interact. Taking early, joined-up advice from advisers in each relevant jurisdiction is prudent to ensure that your wishes are respected and your family is protected, wherever your assets are held. To find out how we can help you protect your family and plan for the future, contact our experienced Family Law team.
