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What Happens To Australian Expats’ Estate If They Die Overseas?

What Happens To Australian Expats’ Estate If They Die Overseas?

A rising number of our customers live abroad far into retirement, and many of them buy real estate in the form of a primary residence or vacation properties while they are doing so.

Most Australian expats don’t anticipate passing away suddenly while living abroad, and succession and estate preparation are often put off until later.

Australian Expat Estate Planning in the UAE

When a person in Dubai passes away without leaving a Will, it is likely that Sharia law, which is a system of forced heirship benefiting the deceased person’s natural parents, legal spouse(s), and natural children in fixed shares, will govern the distribution of his or her assets located in this country.

It would be wise to think about writing a will and having it registered at the DIFC Wills and Probate Registry if you have significant assets in the UAE.

According to a collaborative effort by the Government of Dubai and the DIFC Courts, non-Muslims who invest and reside in the UAE now have the choice to disperse their assets and/or choose guardians for their children in line with the instructions in their Will.

Sharia law is not used by the DIFC Courts; instead, Common Law principles are used.

Estate Planning for Australian Expats in the UK

The UK Inheritance Tax, which is 40% of an estate valued over £325,000 and is a tax on all assets, not just British assets, may be applicable to Australian expats living in Britain who have maintained a UK domicile.

Only UK assets will be subject to inheritance for non-domiciled beneficiaries. 

European Estate Planning for Australian Expats

Portugal is a popular retirement destination for European expats in part because there is no inheritance tax. Although inheritance taxes are present in the majority of European nations, they are typically lower than those imposed in Britain and Ireland.

This article’s goal was not to review inheritance taxes, but to encourage Aussie expats to get expert advice on issues related to succession planning and to draft and execute wills in the countries where they have assets.

To help transfer assets to the next generation, it may be possible to structure your affairs in trusts or company structures, but this planning is highly specialised and outside the scope of this article.

Our International tax specialists will examine the client’s situation, identify the potential problems, and offer solutions for expats living aboard.