Inheritance from relative living abroad

RichieUK

My brother died unexpectedly a week ago whilst living and working as a permanent resident in the Philippines, where he had lived for nearly 10 years. He was still a UK citizen and prior to this had worked the previous 20 years in other asian countries. He owned several condominium apartments in the Philippines, some with mortgages on them. I do not as yet know if he held assets in other asian countries where he had previously lived. I do not know yet if he had filed a will somewhere. He was never married and had no children. The only beneficiaries of his estate should be me and my sister who also lives abroad. My brother had a part share with me and my sister in the house where I am currently living in the UK, which we inherited from my mother. I did the probate for mother's estate after her death but as all her assets were UK based this was straightforward to do. I do realise we (my sister and I) will have to get transfer of assets from the asian countries carried out by legal professionals who will no doubt fleece us in the process, but I want to start the process fully informed and with eyes wide open. I am initially trying to establish the correct probate process with assets located in two (or more!) countries involved.  I am going the Philippines in 2 weeks time to stay there 2 weeks to obtain proof of what assets he owned.

Must one country take precedence in the probate process (say Philippines cos he was resident there) or can the assets after going through the probate process in each individual asian country be added to his estate in the UK so the probate can be carried out here? Or is this such a potentially complex mess that our only choice is to go to a UK law firm offering guidance in probating foreign assets and to get prepared to get shafted by them?

Marcon

RichieUK said:

My brother died unexpectedly a week ago whilst living and working as a permanent resident in the Philippines, where he had lived for nearly 10 years. He was still a UK citizen and prior to this had worked the previous 20 years in other asian countries. He owned several condominium apartments in the Philippines, some with mortgages on them. I do not as yet know if he held assets in other asian countries where he had previously lived. I do not know yet if he had filed a will somewhere. He was never married and had no children. The only beneficiaries of his estate should be me and my sister who also lives abroad. My brother had a part share with me and my sister in the house where I am currently living in the UK, which we inherited from my mother. I did the probate for mother's estate after her death but as all her assets were UK based this was straightforward to do. I do realise we (my sister and I) will have to get transfer of assets from the asian countries carried out by legal professionals who will no doubt fleece us in the process, but I want to start the process fully informed and with eyes wide open. I am initially trying to establish the correct probate process with assets located in two (or more!) countries involved.  I am going the Philippines in 2 weeks time to stay there 2 weeks to obtain proof of what assets he owned.

Must one country take precedence in the probate process (say Philippines cos he was resident there) or can the assets after going through the probate process in each individual asian country be added to his estate in the UK so the probate can be carried out here? Or is this such a potentially complex mess that our only choice is to go to a UK law firm offering guidance in probating foreign assets and to get prepared to get shafted by them?

That famously qualified answer: it depends. First step is to do what you can to establish whether or not he left a will, which as I guess you've already realised might not be that easy. Next step is to try and pin down which countries you'll be dealing with in terms of where assets are located.

There's a good general guide to inheritance tax laws in the Philippines here: https://www.globalpropertyguide.com/asia/philippines/inheritance

You refer to 'being fleeced' and 'getting shafted' by lawyers, but much will depend on how full and accurate your instructions to them can be. Providing full, timely and comprehensive information would substantially cut down the time required and (usually) the costs, but that's going to be quite a challenge for you, never mind them!

The position could be further complicated by the fact your sister lives outside the UK, so you'll need to take into account the tax laws re inheritance in whichever country she inhabits.

Keep_pedalling

You will certainly need to employ a professional to deal with his none UK estate, but if his UK estate comprised of just a share in your house should be a simple job. Estate tax in the Philippines id 6% but I am not sure if that applies to his UK assets.

Is your home owned as joint tenants or tenants in common? 

user1977

I would expect probate to be primarily run from whichever country he was domiciled in, which sounds like the Philippines. Inheritance of real estate is generally under the rules of the local country, so you'll need advice from any other jurisdictions where he owned property and if necessary sort out local probate or equivalent.

poseidon1

Sadly just to add to your offshore difficulties, UK HMRC may also come knocking at door with the potential contention that they consider your  brother retained his UK domicile of origin ( a specific tax definition of the term ) for inheritance tax purposes and as a result his entire worldwide assets became subject to IHT here as well.

Unfortunately, it seems this question may well arise as a result of his share in house you now reside. Assuming you all held respective shares in the property as tenants in common, UK probate will also be required to deal with transfer of his deceased share on intestacy  ( assuming of course there is no will, overseas or otherwise ).

Cross border estates can be highly complex, so on your return from the Philippines, it would make sense to to engage an appropriately qualified UK solicitor  to handle the transfer of your brother's share in the UK property, as well as consider the rebuttal evidence needed to show your brother had severed his ties to the UK for inheritance tax purposes.

A word of warning, not many solicitors have specific knowledge or experience in cross border estate matters, so recourse should be made to the Society of Trust and Estate practitioners (STEP) directory  in the first instance.

MobileSaver

RichieUK said:

I do not know yet if he had filed a will somewhere. ... The only beneficiaries of his estate should be me and my sister

Just to state the obvious; there's no "should" here until you've ascertained whether there was a valid will or not. 

If there is a will then the beneficiaries could be anyone and if that isn't you and your sister then you may not want to involve yourself in dealing with the estate...