There are four main issues to consider when dealing with an estate administration where there are beneficiaries living abroad.
1. Getting appropriate ID
For executors and solicitors dealing with beneficiaries abroad, it is necessary to ensure that you properly identify the beneficiaries before making any payments to them.
This will usually include asking the beneficiaries to send proof of ID documentation.
Where foreign ID documents or copies are being produced, make sure that you are completely satisfied that you have adequately identified the beneficiary and the documents provided are genuine (do you know what genuine Bulgarian passport looks like, for example?)
Ideally you should ask an overseas beneficiary to provide a copy of their foreign ID documents, which have been certified by a notary public and legalised with the Hague Apostille in their home country.
2. Currency Exchange
If you will be making the distribution to a foreign bank account, you should give proper consideration to the most cost-effective way of making the international payment and how to protect inheritance funds when transferring money abroad.
Exchanging the inheritance funds from one currency into another without proper consideration can unnecessarily cost the estate hundreds if not thousands of pounds.
To ensure that you are complying with your duty to act in the best interests of the estate, consult a specialist currency exchange company regarding how to best deal with the transfer of the funds, especially if the distributed amount will be substantial.
Currency exchange specialists do not usually charge any fees and they offer a better exchange rates than the banks. A currency exchange company can save the estate between 2-4% of the amount transferred by offering a better exchange rate than the banks.
If, for example, you are transferring £50,000 to a beneficiary overseas you could cost the beneficiary £1000-£2000 by not properly considering how best to make the international payment.
Awareness of the benefit of currency exchange companies is increasing as people become more and more likely to have international or cross-border links. It’s therefore best to be proactive and discuss the options with the beneficiary, especially if you are a solicitor or other professional dealing with the estate, rather than face criticism after transferring the funds without properly considering the options.
If you would like more information about currency exchange and the best way to send money abroad, contact Worldwide Lawyers on 01244 470 339 or email firstname.lastname@example.org. We will be happy to recommend a currency exchange specialist to provide, free no obligation information.
3. Overseas Bankruptcy Searches
It’s important to ensure that you have undertaken an overseas bankruptcy search in relation to the beneficiary.
The costs and procedure required for bankruptcy searches varies from country to country. Worldwide Lawyers will be happy to undertake an overseas bankruptcy search for you.
Usually the information required to undertake an overseas bankruptcy search includes simple information such as the name, date of birth and address of the beneficiary, however, the information required varies depending on the country.
Contact Worldwide Lawyers on 01244 470 339 or email email@example.com to obtain a quote and find out what information will be required to undertake the search.
4. Foreign Tax – Consider the potential for double taxation and how to mitigate
A beneficiary who is tax resident abroad, may be personally liable to pay inheritance in that country even if inheritance tax has been paid in the UK.
Often overseas beneficiaries will be entitled to receive some form of refund or credit with regard to any tax already paid by the UK estate on the same assets.
However, any refund or credit often needs to be claimed from HMRC by the executor or solicitor dealing with the UK estate rather than in the beneficiary’s country of residence. So, it may be worth considering the tax position from the outset to ensure that the relevant application will be made to HMRC or that you are able to provide the beneficiary with the information that they need to limit double taxation as much as possible.
If you require any assistance with regard to a cross border estate or with an estate with beneficiaries abroad, please contact Worldwide Lawyers on 01244 470 339 or email firstname.lastname@example.org and our friendly and knowledgeable team will be happy to assist.