EU Succession Regulation (Brussels IV) and Its Application in Cyprus
The European Union Succession Regulation, commonly known as Brussels IV, is a landmark regulation aimed at simplifying the often complicated cross-border inheritance matters within the EU. Implemented on August 17, 2015, it harmonises succession laws across participating EU member states, enabling a more streamlined and uniform approach to international estate planning and administration.
The EU Succession Regulation
Brussels IV was introduced to address the complexities arising from the differing succession laws among EU member states. The regulation primarily focuses on:
- Jurisdiction: Determining which country’s courts have authority over a cross-border succession.
- Applicable law: Identifying the governing law for a cross-border succession.
- Recognition and enforcement: Ensuring that decisions, authentic instruments, and court settlements related to a cross-border succession are recognised and enforceable across the participating EU member states.
Under Brussels IV, the general rule is that the law of the country where the deceased had their habitual residence (Domicile) at the time of death governs the succession. However, an individual can choose the law of their nationality to apply to their succession through a valid choice of law in their will or other estate planning documents.
It is essential to note that the United Kingdom opted out of Brussels IV. Therefore, the regulation does not directly apply to UK citizens or UK-based assets. Nevertheless, it still has implications for UK citizens living in Cyprus, as explained below.
Application of Brussels IV in Cyprus: EU Citizens
For an EU citizen residing in Cyprus, Brussels IV simplifies the succession process. Suppose the EU citizen has not made a choice of law in their will. In that case, the law of Cyprus (the country of their habitual residence) will generally govern their entire estate, including assets located in other EU countries.
However, if the EU citizen chooses their home country law to govern their succession, then their home country law will apply to their worldwide estate. This choice of law can help ensure that the EU citizen’s estate is administered according to their home country’s legal traditions and customs.
Application of Brussels IV in Cyprus: UK Citizens
Although the UK opted out of Brussels IV, the regulation still has implications for UK citizens residing in Cyprus. In the absence of a choice of law, the law of Cyprus, as the country of habitual residence (Domicile), will govern the succession of a UK citizen living in Cyprus.
Typically, English law distinguishes between real and personal property. In the context of legal disputes between different legal systems, a further distinction is made between immovable and movable property. Immovable property encompasses freehold and leasehold interests in land and other interests that are directly or indirectly related to land, such as mortgagee rights and rent charge rights.
The separation between movable and immovable property is crucial because, according to English law, the succession of immovable property is determined by the law of the location of the property (the lex situs) at the time of death. In contrast, movable property follows the law of the deceased’s domicile (the lex domicilii).
Not all foreign jurisdictions adhere to the same rules concerning domicile or the differentiation between immovable and movable property as per English courts. For deaths occurring on or after August 17, 2015, where the EU Succession Regulation applies, the chosen law will govern the entire succession, encompassing both movable and immovable property. Consequently, if a UK national possesses immovable property in an EU state where the Regulation is enforced, and they validly elect for English law to govern their succession, the EU state where the immovable property is located will apply English domestic succession law. When a valid choice of law has been made, renvoi (the process of referring the legal matter back to another jurisdiction) is excluded.
However, if the UK national relies solely on their habitual residence in England to determine the applicable law for their succession, the domestic law of the location of the property (the lex situs) would apply, following the standard rules of English succession. This arrangement effectively means that for immovable property located in a different country, such as Cyprus, the succession laws of Cyprus would govern the distribution of the property, even if the rest of the estate is governed by English law.