You may need separate wills for your offshore investments
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MANY South Africans are investing in property offshore in popular destinations such as Portugal and Mauritius.
In fact, property sales of more than R500 million, involving South African and international property buyers, have been concluded in Mont Choisy La Réserve, a luxury estate in Mauritius.
As more South Africans invest in offshore assets across the globe, Mandy Dix-Peek, the head of Old Mutual Wealth Fiduciary Services, says it is critical that, where one holds assets offshore, often the best way to protect the assets is to set up a will in the jurisdiction of the assets, because a South African will might not be recognised there.
Different countries have different laws regarding inheritance. Dix-Peek says that because there is no one-size-fits-all approach, you should consider multijurisdictional estate planning.
The law does not require South Africans to have more than one will if they have assets here and offshore. However, a South African executor is permitted to manage only the matters and assets that are held domestically. An offshore will would, therefore, have to be handled by an executor in that jurisdiction, or permission would have to be sought for the South African executor to administer the estate. The process can take time and can draw out the process further.
Dix-Peek says inheritance laws differ, depending on the asset type and country.
“For example, in Mauritius, immovable property is governed by Mauritian law, but the inheritance of movable assets is governed by the laws of the last jurisdiction of domicile of the deceased or his/her country of permanent residence. This applies to Mauritian and foreign nationals.”
Beyond that, says Dix-Peek, South Africans who own or plan to purchase property in Mauritius need to be aware that Mauritius is a forced-heirship jurisdiction that reserves a portion of the estate for the children of the deceased – this applies to Mauritian citizens and foreigners.
Another factor for South Africans to consider is double taxation that may occur when winding up an estate. However, it does not occur in countries with which South Africa has double-taxation agreements, such as Botswana, Lesotho, Swaziland, the UK, US and Zimbabwe.
Dix-Peek says that there are a few things all South Africans should consider when planning multijurisdictional estates.
“The first is engaging with specialists and getting advice on the best course of action. Broadly, this will involve the jurisdiction, the nature of the assets and double-taxation agreements. Depending on how these three circumstances stack up, a decision needs to be made about whether a will in the foreign jurisdiction is necessary,” she says.
*For more on wills and estates, read the September 2021 issue of our information-packed IOL MONEY monthly digital magazine.