Reader question: I am British and have lived in France since 2010. I have pensions, bank accounts and a flat in England, but my home and day-to-day accounts in France. I don’t have any close relatives. I have decided I want to leave everything to the WWF. Do I need a UK will to do this?
If you want to leave your estate to a charity, you will need a will.
It is possible to leave your estate all under one will, although as you have assets in two countries, it is generally easier to administer if you have a will for each.
You could use a French will to leave the non-UK assets to WWF France, and a UK will to leave the UK assets to the WWF.
The question is whether to leave the UK assets to WWF UK or WWF France?
Treaty does not address charity exemptions
As you are French-resident, France will tax your global estate on death.
Bank accounts in the UK would be disregarded for UK inheritance tax under the Double Taxation Treaty of 1963. They would instead be taxed here.
Real estate would be assessed for tax in the UK, and the UK tax can be credited against the French tax due on the same asset.
However, the treaty does not address charity exemptions.
Consider leaving all assets to French charity
Prior to Brexit, legacies to charities were given mutual exemption from inheritance tax between France and the UK, but that exemption is no longer in place.
As such, a legacy by a French resident to a UK charity would be assessed for tax in France at 60%, less the exemption of €1,594.
The UK will tax a legacy of UK assets to a French charity for the same reason, but allows a blanket tax-free allowance of £325,000.
So, strange as it seems, it might be sensible for the UK will to leave the UK estate to the French WWF, which will not face tax in the UK if the UK assets are below £325,000, and will be tax-free in France.
So the result here is that the UK charity misses out.
I did write to the Brexit secretary about this prior to Brexit, and drafted a proposed amendment to the treaty to resolve it, but without reply.