Post-Brexit international succession: effects on assets

Brexit marked a turning point in international successions between Italy and the United Kingdom, definitively separating the two legal systems from the European succession system. This introduced new complexities for Italian citizens residing in the United Kingdom or with assets in both countries. In this article, we will examine the main aspects of post-Brexit international succession, with particular attention to the effects on assets and patrimonies in Italy and the United Kingdom.

Italy: The National Succession System

In Italy, succession is governed by Italian law, without the application of Regulation (EU) No. 650/2012, no longer valid following Brexit.

Italian law distinguishes between real estate and movable property:

• Real estate located in Italy is always subject to Italian law (principle of lex rei sitae).
• Movable property may be governed by the law of the deceased's country of residence.

For Italian citizens residing in the United Kingdom, the succession of assets in Italy will therefore be governed by Italian law, while that of assets located in the United Kingdom will be governed by British law.

United Kingdom: The New Post-Brexit Rules

From 6 April 2025, the "Long-Term Resident" (LTR) rule came into force, which modifies the tax treatment of inheritances in the United Kingdom.

• Anyone who has been a UK tax resident for at least 10 of the last 20 years will be subject to Inheritance Tax (IHT) on their worldwide assets, even if they were resident abroad at the time of death.
• This means that assets held in Italy or elsewhere may also be taxed at 40% above the exempt threshold.

Furthermore, the United Kingdom is no longer part of the European inheritance system, making The European Certificate of Succession is inapplicable. This complicates the enforcement of inheritance rights between Italy and the United Kingdom.

Conflicts of law and double taxation

The separation of the two legal systems increases the risk of double taxation and conflicts of law. In the absence of specific bilateral treaties:

• Assets located in each country are subject to local legislation.
• This can have complex tax and legal repercussions.

Practical examples:

1. A British citizen who dies in Italy: real estate in Italy is subject to Italian law, while movable property is subject to British law.
2. An Italian citizen resident in the UK with movable property in Italy: Italian movable property may be subject to both Italian law and British Inheritance Tax, creating potential double taxation issues.

Success Planning: What to Do

To reduce the risk of double taxation and conflicts of law, we recommend:

• Draft separate wills: one for assets in Italy and one for assets in the UK, complying with local regulations.
• Consult legal experts: use professionals specializing in international inheritance law, such as those at Agenzia delle Successioni.
• Evaluate tax residency: consider the implications of the LTR rule in the UK, especially for Those who have lived in the country for long periods.
• Learn about inheritance taxes: learn about the rates, exemptions, and tax-free thresholds in both countries.