The freedom afforded to British subjects (and certain others) to gift their Cypriot assets by Will to whom they wish has been severely restricted owing to the recent revocation of Section 42 of CAP 195. This is a major change in the Law of Succession in Cyprus.
Accordingly, under the Cypriot forced heirship rules, natural children of the deceased have a right to each inherit a share of their parents’ Cypriot estate equal to the amount inherited by the surviving spouse. This forced heirship makes it impossible to disinherit the deceased’s natural children. Therefore, if the deceased dies leaving natural children or their descendants, an absolute gift to the deceased’s spouse provided for under the terms of a Will, will not be valid.
This major change in the Cyprus Succession Law has been followed by the implementation of an EU Regulation governing the succession of European Assets (Brussels 1V).
The basic principles of this Regulation and how it relates to persons living in Cyprus and having assets in Cyprus are as follows:-
a) Cypriot law applies to the succession of the estate; and
b) The Cypriot Court has jurisdiction to rule on the succession of the estate
HOWEVER, under a choice of law provision in the Brussels 1V Regulation any person can choose the law of their country of their nationality as the law to govern the succession of their estate within the participating EU states.
For example, if you are a British national with property in Cyprus you can choose UK law to apply to the administration of your estate and in so doing avoid the Cypriot forced heirship rules. Any choice of UK law provision would however need to take into account the differing legal jurisdictions within the UK of England & Wales, Scotland and Northern Ireland.
The EU Regulation provides that the choice of applicable law has to be made expressly by declaration in a Will.
Otherwise the default position is that the law of your habitual residence will be the governing law for the distribution of your estate.
The above is a simplified overview of the recent changes in succession law that will affect the administration of assets in Cyprus. We strongly recommend the immediate and careful review of your Wills to take into account your personal circumstances and whether the recent changes will affect you.
We can advise on the amending of your existing Wills to include an appropriate declaration and also how the recent changes may affect other factors such as the process of obtaining probate and administering your estate in Cyprus.