DEBATES on next year’s referendum on Scottish independence seem to be in the headlines every other day but, on matters legal, Scotland has, of course, always marched to the beat of its own drum.
So when it comes to writing a will to govern what happens when someone dies, the laws in Scotland and England have always been quite different. Therefore for people with family and household interests on both sides of the Border – and there must be many thousands with varying levels of income and assets – the position is often too important to ignore when considering inheritance issues.
This raises the question as to whether a Scot who lives in England, or an Englishman who lives in Scotland, should sign a Scottish or English will, especially where there is still a close family connection, or other specific interests, on both sides of the Border.
When Sarah, a Scotswoman, married her English fiancé, Mark, eight years ago, she didn’t have a will in place. Following the marriage, she soon started a new family in London. She no longer had any close relatives in Scotland and sold her flat in Edinburgh to help purchase the couple’s joint property in Kent. But Sarah still considered herself very much a Scot and so was in a position to instruct her solicitor, still based in Edinburgh, to draw up a Scottish will, notwithstanding her South-east England address on the basis that she believed this to be in the best overall interests of herself and her family.
One example of the difference between the two legislations which is of practical everyday importance is that in Scotland, unlike in England, there is no automatic revocation of an existing will when someone gets married. Also, there are prescriptive laws in Scotland which protect spouses and children from being disinherited, no matter what is contained in a will; in England the matter of disinherited wives, sons and daughters is ultimately left to the discretion of the courts.
Which law applies to the last will and testament of any individual is governed by a piece of legal terminology known as “the law of your domicile”. In simple terms this means that everyone should draw up their will according to the law of the country they consider their permanent home. It is distinct from residence and nationality and while a person can have dual-nationality (and even residence) they can have only one country of domicile. And so, for the purposes of this article, that has to be either Scotland or England.
So where a person still considers themselves domiciled in Scotland (if, for example, they intend to return to Scotland at some point later in life, or to be buried there), Scottish advice should always be sought. This is particularly the case where the value of the estate exceeds the inheritance tax nil-rate band (currently £325,000), as Scottish forced heirship provisions (which give a spouse and children the right to challenge a will if they are disinherited) could have adverse inheritance tax consequences.
Even should a majority of Scots vote to remain citizens of the United Kingdom in next year’s independence referendum, these national distinctions are not likely to merge any time soon as the legal regulation of each jurisdiction develops. For example, the Scottish Law Commission recently made a number of recommendations on succession law, intestacy and ways to ensure that children and spouses are not disinherited under a will.
A Scottish Government spokesperson said it recognised that the legislation [in Scotland], now over 40 years old, “may not, therefore, meet the needs, or reflect the relationships of the citizens of a modern Scotland. The Commission’s work provides us with a firm foundation for taking this forward.”
The EU has very recently introduced new rules to help clarify the position in complicated situations, where the law of two or more EU countries could apply. From August 2015, most EU citizens will be able to choose whether the law applicable to the succession of their moveable estate (such as cash and investments) should be under the rules determined by the country of their habitual residence or the country of their nationality. However, the United Kingdom has chosen to opt out of these regulations and so the question of whether Scottish or English law applies to the affairs of someone in the UK will continue to arise, whatever the outcome of the vote in September 2014. • Peter Shand is a partner with law firm Murray Beith Murray www.murraybeith.co.uk.