Checklist for Overseas Beneficiaries Bankruptcy Searches
Where an estate has beneficiaries located abroad there will be a few additional matters for the PRs and their advisors to consider.
International Bankruptcy Searches
As you will know, it is incumbent on solicitors to undertake a bankruptcy search for each beneficiary before distributing inheritance funds to them. This mitigates the risk of the PRs and solicitors being subject to a claim from a bankrupt beneficiary’s creditors.
This requirement includes beneficiaries that live abroad. If the beneficiary lives in another country, a bankruptcy search should be carried out in that country. Each country records bankruptcies differently and a search should be conducted via a service with the relevant expertise.
At International Bankruptcy Searches we have a dedicated website which provides information about conducting bankruptcy searches abroad. You can arrange overseas bankruptcy searches directly online or by contacting one of the specialist team on 01244 478 201 or info@internationalbankruptcysearches.com
Getting Valid ID Document and Account Information
You will of course know the importance of ensuring that you have verified the identity of the beneficiaries and their bank details before sending any payments to them. This will usually involve the beneficiary sending their original or a certified copy of their identity documents to you.
Beneficiaries located abroad are unlikely to want to post their original documents overseas.
Best practice is to ask the overseas beneficiary to provide a copy of their ID and bank statement, certified by a notary public and legalised /Apostilled in their own country. It is then possible the verify the authenticity of the document using the details on the apostille.
Consider the Currency Exchange
Where a beneficiary is located abroad, it is likely that they will require the inheritance to be paid into their bank account in their local currency. In order to act in the best interests of the estate and preserve as much of the inheritance funds as possible, it is advisable to consult a recommended currency broker before sending funds to the beneficiary overseas as there are a number of potential pitfalls when sending funds abroad which can result in the estate / beneficiary loosing significant amounts.
A currency broker can convert the currency from GBP to the beneficiary's local currency and arrange the transfer at a favourable rate. The services of a currency broker are free but can save the beneficiary hundreds if not thousands of pounds depending in the amount being distributed.
If you are dealing with an estate where funds need to be distributed abroad (or indeed if there are assets abroad that need to be sent to be collected into a UK account) we will be happy to recommend a currency broker to assist with this at a favourable exchange rate. Contact us on 01244 478 201.
Double Taxation
Beneficiaries resident abroad may need to pay tax on their inheritance in their home country, even if UK inheritance tax has also been paid. Overseas beneficiaries can however often be entitled to receive tax refunds or relief to prevent or limit double taxation
The credit or relief may need to be claimed from HMRC or information about UK taxes may be requested by the beneficiary so that they can make a claim in their country of residence. Therefore, it is always worth considering the tax position to ensure the correct application will be made to limit, or even avoid, double taxation as much as possible for the overseas beneficiary.
If you are dealing with an estate where there are beneficiaries located abroad or an estate where there are assets abroad, Worldwide Lawyers will be happy to help. Please feel free to call (01244 470339) or email (info@worldwidelawyers.co.uk) with any queries.
or contact us on 01244 470339