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News-1-scotland

The impact of Scottish Independence on the property market

The question of whether Scotland will remain as part of the United Kingdom, following the Referendum on 18 September this year, has the potential to impact on the Scottish residential property market.

Although unlikely to impact on purchasing decisions for those buying from within Scotland, what about people coming to Scotland from south of the border or from further a field?

The recovery of Scotland’s housing market since the recession has been partly supported by buyers coming from England who are moving to Scotland in search of a better quality of life and value for money. Estate Agents Savills reported that there was a 100% increase of London buyers registering with Savills to buy a Scottish property during 2013, compared with the year before. There are however undertones of uncertainty around the Independence debate and how this will affect mortgages, currency and tax is now becoming a concern for some.

Around 65% of residential property transactions in Scotland each year are dependent on a mortgage, therefore the lending rates applied in an Independent Scotland would have a big impact on the market. As a new country with a small economy, it is likely that Scotland would incur a higher credit risk, and therefore have a lower credit rating than the rest of the UK. The Scottish banking sector is likely to be perceived as more vulnerable which could result in higher funding costs.

Increased risk potentially means higher mortgage rates driving down the value of housing due to the affordability for buyers. This could lead to the Scottish residential market stalling with sellers unwilling to accept lower prices as was the case during the recent economic downturn.

In the event of a Yes vote (and if Scotland does not adopt Pound Sterling) then Scotland could create its own currency, which would provide the added complication of currency exchange rates. A comparatively weak Scottish currency could however benefit international property buyers adding value for money. Clearly though a strong Scottish currency could have the adverse affect.

Another issue with the potential to impact on the property market would be the level of taxation in an independent Scotland. In addition the changes to Stamp Duty, which will be replaced by the Land and Building Transaction Tax regardless of the outcome of the Referendum, will need to be considered.

The strong property markets in Aberdeen and Edinburgh have been supporting Scotland’s overall property market and have boosted surrounding areas such as Tayside and Fife. The buoyancy of a housing market is directly related to the job market and whether or not an independent Scotland would have a negative impact on Edinburgh’s position in financial services or on Aberdeen’s energy sector remains to be seen. This is likely to depend on whether or not the big players in the leading service industries pull their head offices out of Scotland as threatened by Standard Life.

Scotland’s natural scenic beauty, rich heritage and quality of life are likely to remain a pull factor for many international purchasers whatever the outcome of this September’s referendum. Research which analysed the direct real estate holdings of the top tier of Ultra High Net Worth Individuals (UHNWI) from across the globe with net assets in excess of US$30m has revealed that Scotland is second only to Monaco in terms of its ability to attract internationals. In Scotland, 31% of UHNWI buyers are from overseas and are investing predominantly in private houses and estates.

The purchase of a Scottish property by the ultra-wealthy is a luxury, and buying decisions are unlikely to be particularly influenced by political-economic factors. What is less clear is how buyers of mainstream housing from England or abroad are likely to view Scotland in the event of a Yes vote due to the lack of information about the fundamental issues of currency, mortgages and property taxation.

Contact Worldwide Lawyers to find a lawyer to help you with your Scottish property purchase.

News-2-divorce

International couple Chris Martin and Gwyneth Paltrow to “uncouple”

Musician Chris Martin and actress Gwyneth Paltrow have announced that they are “consciously uncoupling” in other words, they are to amicably separate.

The international couple have two young children and have spent their married life both in the UK and the USA. The Sunday Times reported that the couple have a combined wealth of nearly £120 million and own a portfolio of properties both in the UK and the USA including their home in L.A., a Manhattan apartment, a Hamptons estate and a mansion in London’s Belsize Park.

As with any separating couple where there are international elements to their lifestyle, Chris Martin and Gwyneth Paltrow will have many important factors to consider when bringing their marriage to an end. Who will look after the children and where? Where will they divorce? What will happen to assets located abroad?

In relation to their children, the couple has indicated that they are intending to “co-parent”. But what happens if they can’t agree on where the children will live and who they will live with? It is not unusual for a divorcing couple to disagree about arrangements for their children but issues of residence and visitation can become all the more challenging if the parents live or intend to live in different countries.

In England, if one parent wishes to move abroad with a child, they either need to have permission from the other parent or the permission of the court. Parents, who have a court order in respect of contact with their children, may need to get it registered with the court in the country where the child lives in order to it be enforced.

If one parent removes a child from the country in which they live without the permission of the other parent this known as parental child abduction. It is clearly unlikely in the case of Martin and Paltrow but figures released in December 2013 by the Foreign & Commonwealth Office (FCO) show that the number of parental child abduction and custody cases has more than doubled over the last decade, with almost two children being abducted abroad each day. This can have severe consequences, not only the emotional distress to all involved but also criminal sanctions for the abducting parent and the onerous financial costs of fighting custody battles in foreign courts.

There can be vast differences between the laws relating to divorce and the settlements awarded in one country to another. Couples who live or have lived in more than one country often have the option of choosing which country they would prefer to start court proceedings. This does not necessarily have to be the country in which they live or where they married.

In Chris Martin and Gwyneth Paltrow’s case, it may be possible for them to divorce in LA where they currently live or in England as they previously lived in London which has recently been dubbed as the ‘divorce capital of the world’ due to generous financial settlements and one in six cases having an international element.

The vast differences between the divorce and settlement laws in various countries can sometimes result in divorcing couples ‘forum shopping’ which sees parties shopping around to see which country’s courts will give them the best deal. For example, the courts in some countries will consider a homemaker as equal to a breadwinner, others will not.

Clearly where the laws of one country are beneficial to one party they are likely to be detrimental to the other. This can sometimes result in a race between couples to get in there first and have divorce proceedings started first in the country that will get them a better divorce settlement.

Likewise if there are properties or assets abroad different countries apply different rules as to the ownership of assets. Some courts have the power to make orders in relation to assets both in their country and abroad, but others do not.

There may also be problems with enforcing divorce settlements obtained in one country in another. Where there are assets abroad, it is always important to take advice from an international family lawyer or a property specialist in the country where the divorce proceedings are taking place or where the property or assets are located.

However Chris Martin and Gwyneth Paltrow deal with their separation, they will both need to obtain advice from specialist international family lawyers to help them through the process.

If you need advice relating to international family law or property law contact Worldwide Lawyers who will be able to put you in touch with a specialist lawyer in the appropriate country to help you.

News-4-Newzealand

British urged to take advantage of New Zealand’s new Entrepreneur Work Visa

The New Zealand government has launched a new visa to encourage enterprising migrants to set up businesses down under.

It’s hoped the “entrepreneur work visa” scheme will help create local jobs and support economic growth – particularly outside of Auckland, the biggest city.

The new entrepreneur work visa will replace the current long-term business visa. The entrepreneur work visa will operate under a new points-based system in the hope that it will result in higher quality, more productive businesses.

The scheme offers extra points for businesses outside of the Auckland region, the most popular area for migrants, to encourage people to invest, settle and create jobs right across the country.

Additional points will be on offer according to criteria such as job creation, export potential and business experience. In order to be eligible for this visa you will however require a minimum capital investment of $100,000 which has been set to ensure that applicants have the means to create high-quality businesses.

The Kiwi government are urging qualified British workers to seriously consider the benefits of taking their skills Down Under. The good salaries and enviable lifestyle together with this new visa opportunity is set to make New Zealand one of the most desirable migrant destinations.

If you are considering moving to New Zealand contact Worldwide Lawyers who can help you find a reliable independent lawyer to assist you.

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News-5-Will

The best Will in the world

You may already have a Will which complies with the requirements of English law however if you have assets in another country your English Will may not have the results you intend due to conflicts with the laws of that country.

There are many cross-border issues that can prejudice the successful operation of your English Will. For example:

  • Many countries do not recognise the concept of a trust. Therefore if your Will creates a trust over assets in a country that does not recognise trusts, this could inadvertently give rise to a gift to your executors.
  • Some countries operate the marital regime of Community Property whereby on marriage the possessions of the couple are merged in a joint estate and disposed of by means of a joint Will.
  • Other problems may be created because of the different ways in which different countries apply their inheritance laws. You may be considered to be a citizen of one country, habitually resident in another and domiciled in another, with each country seeking to apply its conflicting laws to your Will.
  • The most common issue however is likely to be forced heirship. Law in England and Wales provides that a person making a Will has testamentary freedom to leave their assets to whomever they wish. Many other countries however have some form of forced heirship laws which require a person to pass a fixed portion of their estate to certain relatives, usually their children or spouse. These rules will apply regardless of what is in their Will.

Forced heirship laws do not however always apply to the estate of a foreign person, or at least do not apply to particular assets. In relation to your assets abroad, English law distinguishes between different types of assets. English succession law is applied to your movable assets (i.e. your investments, cash, bank accounts, personal possessions etc.) but allows the succession law of the country where your immovable assets are (i.e. your land and property) to be applied.

The following examples show how each countries succession laws might apply to a person domiciled in England and Wales with immoveable assets in the following countries:

Scotland: Even as close to home as Scotland forced heirship may present an issue. Scotland has forced heirship provisions called Legal Rights. However, provided you are not domiciled in Scotland when you die, your English Will should be able to deal with your assets in Scotland.

France: France has the most strict and powerful forced heirship provisions. These can require certain percentages of the deceased’s estate to pass to children in preference to the surviving spouse. Movable estate in France can pass in accordance with your English will, however your French property and land may not.

Spain: Spanish nationals are required to leave certain portions of their estate to their children and certain other relatives. Spanish inheritance law does allow citizens of England and Wales the freedom to leave all their estate to whoever they like.

Switzerland: Although there are forced heirship requirements for Swiss nationals, if your English Will contains wording specifically applying the succession law of England and Wales, then your English Will could be effective in dealing with your Swiss estate.

Brazil: In Brazil, children and the surviving spouse are automatically entitled to 50% of the deceased’s estate. If there were no children in the marriage, then parents or grandparents would also be able to claim a share of the estate. If you are domiciled in England and Wales, succession of assets situated in Brazil will be governed by English law unless this is less favourable to the spouse and any children, in which case Brazilian law will apply.

Louisiana: The only state in the USA which has a forced heirship regime. Here the forced share may be claimed by forced heirs that are 24 years of age or younger. The fixed share is at least 50% of the estate of the deceased. Any property of a person domiciled in England and Wales which is located in Louisiana can however pass in accordance a Will made in England and Wales once probate has been received.

Various conflicts and complexities can arise from cross-border estates. There may also be tax implications for example where your spouse is not able to inherit the assets located abroad making the any spouse exemption to inheritance tax unavailable.

It is generally recommended that an additional Will should be made in relation to foreign assets as this can help to eliminate ambiguities and make it cheaper and quicker to administer the estate. However, if you intend to rely on an English Will to deal with foreign assets, care must also be taken to ensure that the wording does not preclude this. Any foreign Will should be carefully drafted to ensure that it does not conflict with or revoke your English Will.

Clearly legal advice needs to be taken from a lawyer who specialises in the succession law of the country in which your assets are held. It is recommended that this advice is taken not only when considering making a Will but before you purchase property abroad.

Contact Worldwide Lawyers for legal assistance with Wills, Probate and estate administration abroad.

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The happiest places to live

A poll of over 1,000 British expats living in destinations including Australia, Canada, France, Jersey, South Africa, Spain the UAE and the USA revealed the places where Brits abroad feel happiest.

The poll found that in general, moving abroad results in a better quality of life as three quarters of Britons who decided to leave the country reported a better overall lifestyle.

The majority of those polled said they earn more than they did at home, while half benefit from a lower cost of living. 58% reported that they are generally happier than they were in Britain.

Most of the people who moved to the USA enjoy an increase in salary as well as a lower cost of living. 86% of expats in Switzerland felt that they had superior healthcare to that in Britain.

The results for Jersey show that 73% of expats feel more cheerful than they did in Britain, compared to 56% in Canada and 55% in Australia.

Figures for Spain reveled that two thirds of Brits there have a lower costs of living with the majority considering there to be better healthcare.

France hit the top spot for quality of life with 89% of expats reporting it was better there than in Britain. 60% said the same about South Africa.

79% found that New Zealand was better place to raise children compared with 92% of those who had moved to Guernsey.

When it comes to safety, the Isle of Man tops the polls as 93% of said that they feel safer there than they did at home. Schooling is better there too according to 71%.

A total of 76% polled in the Emirates reported a better quality of life, the majority are happier and 87% have a better overall lifestyle.

Many of the reasons given for being more chipper related to the weather with increased opportunity to enjoy outside activities like going to the beach, swimming and just generally being outside in the sunshine. Other reasons were more relaxed and cheaper lifestyles.

The Office for National Statistics reports that 141,000 Britons left the UK in 2013 and whilst moving overseas is very exciting, it’s important to be well-informed about your chosen destination and what is involved in not only getting there but living there too.

Information relating to healthcare, schooling, pensions, salaries, tax needs to be carefully considered to ensure that the move is a happy one.

If you are thinking of moving abroad and need advice in relation to buying a property abroad, overseas inheritance, cross border child custody or any other legal matter in relation to your move, please contact Worldwide Lawyers who will be able to put you in touch with a reliable independent lawyer to help make the transition as smooth as possible.

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