On 4 July 2012, the EU promoted the European Regulation 650 of 2012, known as ‘Brussels IV’, or the ‘European Succession Regulation’, or ‘ESR’, which came into force on 16 August 2015. The main benefit of the ESR is to introduce a single set of rules concerning the law applicable to the succession of an individual who has connections with an EU Member State. Under the ESR, the law applicable to the succession, unless otherwise provided, is that of the deceased’s habitual residence at the time of death and this is to apply to the whole of the succession. Additionally, the ESR allows a person to choose, either expressly or implicitly, the law of his nationality as the law to govern his succession as a whole.
The UK has ‘opted out’ of the ESR (and so have Denmark and Ireland), which means that the UK has already declared itself as not bound by its terms. Looking at the mechanics of how a European Regulation enters the ranks of the national legislation, the effect of the UK ‘opting out’ is twofold:
(1) on the one hand, the ESR does not form part automatically of the UK legal system, ie it is neither directly applicable nor directly effective in the UK; and
(2) rulings of the European Court of Justice on the ESR do not have, even now, supremacy over inconsistent provisions of UK national law.
In other words, the UK is, already pre-Brexit, apparently ‘immune’ from the effects of the ESR.
But this is not all there is to say, as there are other aspects of the ESR that we must take into account. The main one is that the ESR has been written so as to have universal application. This is a known concept in the international private law environment, be it European or conventional. It means that if the rules of the ESR are applicable to a specific matter, they will be universally applicable and enforceable, and not just limited to those who are part of a European Member State.
The fact that the ESR has universal application allows British nationals to exploit its rules to elect for national law to apply to property situated in an EU country, for example to their Italian villa. It also means that if a UK national is habitually resident in an EU country, and no election for applicable law is made in his/her Will, the domestic laws of that country, including its forced heirship rules, will apply to his/her whole succession, irrespective of where the assets are located.
In either case, the ESR will apply, directly or indirectly, to the succession of a UK individual with assets, or generally connections, with an EU Member State. It will also continue to apply to an Italian national who relocates with his family to the UK, by virtue of its combination with the English conflict of law rules. We recommend taking special advice on this issue.