The EU's Regulation on Succession - European Union Committee Contents


The EU's Regulation on Succession

CHAPTER 1: Introduction

1.  When a person dies their property has to be accounted for, creditors and taxes paid, and the property duly passed on to those who should inherit it. This process is known as succession. The expansion of the EU, and increasing mobility within it, have led to more and more people moving from one Member State to another to work or to retire, and owning property in another Member State. The laws of the Member States governing who is entitled to what of the deceased's property and how that estate is to be administered differ fundamentally. This makes dealing with a succession with cross-border implications potentially very complex. When a person dies resident in Member State A as a national of Member State B, or owning property in both Member States A and B, it is necessary to determine whether it is the law of Member State A or B which governs the succession. Even once that has been resolved it can be difficult to ascertain just how the law of succession of one Member State applies to property located in another.

2.  The complexity of cross-border succession makes it difficult and expensive for individuals affected to plan what should happen to their estate when they die and for creditors and heirs to ascertain and vindicate their rights. This situation is exacerbated by the fact that the period surrounding the death is emotionally charged.

3.  The same issues arise when the cross-border element involves an EU Member State and a third country.

4.  Simplification of the law applying to cross-border succession has been sought for some considerable time, but without success. At the broader international level a number of Conventions have been negotiated within the framework of the Hague Conference on Private International Law.[1] Legislative action by the EU in this area has been envisaged for almost a decade in successive programmes relating to the Area of Freedom, Security and Justice.[2]

5.  Legislation by the EU can fully address the problems that arise when the cross-border elements of a succession are confined to Member States. Where those cross-border elements involve third countries EU legislation can only regulate how that succession is to be dealt with as between Member States insofar as it involves more than one Member State. A further international agreement would be necessary in order to achieve with a third country the same full degree of regulation that EU legislation can bring to Member States.

6.  In March 2005 the Commission issued a Green Paper[3] seeking views on what action might be taken at the level of the European Union in relation to the law governing wills and succession. This was the subject of a report by this Committee[4] and correspondence with the Minister. We recognised the real practical benefits that could be derived from suitable European legislation. We also highlighted the difficulty in finding common workable rules in this area and set out some "red lines" which European legislation should not cross if it was to be acceptable to the UK.[5]

7.  On 14 October 2009 the Commission brought forward their proposal[6] for a Regulation to simplify the rules on cross-border succession. The ordinary legislative procedure[7] applies to the proposal. It is currently under detailed negotiation in the Council. The European Parliament has yet to give it a first reading.

8.  Sub-Committee E, a list of whose members is at Appendix 1, has conducted an inquiry into this proposal. The call for evidence is reproduced at Appendix 2. Those who have submitted written or oral evidence are listed at Appendix 3. We are grateful to all those who submitted evidence, particularly for their elucidation of a highly technical subject.

9.  The Protocol on the position of the United Kingdom and Ireland in respect of the area of freedom, security and justice gives the UK an opt-in to the formal negotiations and adoption of this proposal. If the UK does not opt in, it will not be bound by the Regulation that is adopted. The opt-in to the formal negotiations of the proposal needed to be exercised by 22 January 2010.

10.  In the course of this inquiry the Committee formed a preliminary view on whether the UK should opt in to the proposal. We took the view that the opt-in should not be exercised at that stage. In his written statement to the House on 16 December 2009[8] the Minister indicated that the Government had decided not to opt in, but intended to engage informally in the forthcoming negotiations between Member States with a view to improving the proposal. If those negotiations resulted in sufficient improvement, the UK would still have another opportunity to opt in to the Regulation after its adoption by the other Member States.

11.  In deciding whether the UK should opt in, the Ministry of Justice undertook a consultation, on the basis of a paper which provided background information.[9] Those of our witnesses whose evidence was also submitted in response to this consultation are identified in Appendix 3.

12.  The Commission's proposal was chosen by the Conference of Community and European Affairs Committees of Parliaments of the European Union (COSAC) for a pilot exercise on the operation of the new arrangements under the Lisbon Treaty for national parliaments to raise subsidiarity issues in accordance with the Subsidiarity Protocol. The arrangements did not formally apply to this proposal since it was presented by the Commission before the coming into force of the Lisbon Treaty. As part of this pilot exercise we formed a preliminary view that the proposal complies with the principle of subsidiarity.

13.  The correspondence with the Minister on the opt-in, and our response to the COSAC secretariat on subsidiarity, are at Appendix 4.

14.  In this report we outline the major problems arising in cross-border successions and their impact; we consider the major issues of principle in the Commission's proposal to address these problems; and we address the specific issues of subsidiarity and the opt-in. We focus on cross-border successions within the EU, addressing, where it is relevant, the effect of the proposal on successions with a wider international dimension. In our conclusions we highlight where we consider changes to the proposal need to be made.

15.  The subject matter of this proposal is highly technical and the original Commission proposal is likely to evolve in the course of the legislative procedure. This may well stretch into 2011. The Committee will consider the more detailed technical and drafting points, as they evolve in the course of that legislative procedure, as part of its ongoing scrutiny of the proposal.

16.  A glossary of the terms used in this report is at Appendix 5.

17.  The proposal is subject to the scrutiny reserve according to which the Government may not give their agreement to the proposal in the Council until the Committee has finished its consideration and cleared it from scrutiny. As the proposal is likely to evolve in the course of negotiations and the Government intend to continue to negotiate informally, we have decided to retain it under scrutiny despite the fact that the UK has not opted in to the proposal at this stage.

18.  We make this report to the House for information.


1   As at February 2010, the Convention of 5 October 1961 on the Conflict of Laws relating to the Form of Testamentary Dispositions has been ratified by 16 Member States; the Convention of 2 October 1973 Concerning the International Administration of the Estates of Deceased Persons has been ratified by three; and the Convention of 1 August 1989 on the Law Applicable to Succession to the Estates of Deceased Persons has been ratified only by the Netherlands.  Back

2   The Tampere Programme (OJ C 12, 15.1.2001, p.1), the Hague Programme (OJ C 53, 3.3.2005, p.1), and more recently paragraph 3.1.2 of the Stockholm Programme adopted by the Council and approved by the European Council at its meeting of 10-11 December 2009, available at http://www.se2009.eu/polopoly_fs/1.26419!menu/standard/file/Klar_Stockholmsprogram.pdf Back

3   7027/05, COM (2005) 65. Back

4   EU Select Committee, 2nd Report (2007-2008): Green Paper on Succession and Wills (HL Paper 12). Back

5   The red lines were: the EU measure should not in any way call into question the validity of otherwise valid inter vivos gifts, and it should not deal with the administration of estates, the validity and operation of testamentary trusts, matrimonial property law and interests terminating on death such as joint tenancies. Back

6   14722/09, COM (2009) 154. Back

7   The ordinary legislative procedure corresponds to the pre-Lisbon co-decision procedure, under which the Council acts by qualified majority and the measure can only be adopted if the Council and the European Parliament agree. Back

8   HL 16 December 2009 WS 274. Back

9   http://www.justice.gov.uk/consultations/ec-succession-wills.htm Back


 
previous page contents next page

House of Lords home page Parliament home page House of Commons home page search page enquiries index

© Parliamentary copyright 2010