Quick note before we get started. Unfortunately there were a few microphone issues that

unexpectedly arose during recording. That means the guest's audio isn't up to

our usual standard and we ask your forgiveness there. But

this episode covers some incredibly important stuff, so

stick with us.

Welcome to Taxbytes for Expats, the top tax

tips you want to know as an expat. The podcast is here

to help answer the common queries and concerns expats have when moving

to or from Ireland. Complex taxes explained

simply. We'll focus on the Irish and international

tax issues to be aware of to ensure you save time,

money and stress. This is part

one of Stephanie Wickham's conversation with Lisa Quinn

O'Flaherty, a solicitor at Fitzsimons & Redmond

LLP. And in this part one you will hear about the house

buying process and how it works from the legal side, a bit about

the complicated subject of wills and succession planning in Ireland, and lots

of tips from Lisa's experience of working with expats and Irish

citizens living abroad. In the next episode in Part

two, we'll be hearing a little bit more about cross border estate management,

the tax implications of inheritance in Ireland and abroad,

and what it's like to work with a solicitor in Ireland.

Enjoy.

Lisa Quinnel Flaherty is a solicitor and a partner at the Simons

Redmond llp. She works mainly in commercial law and employment

law, but she's also passionate about providing a full suite of legal

services to her many and varied clients. Lisa, thank you so

much for joining us today. We're going to have a great chat about all the

things our clients should know about when they come to Ireland and want to understand

the legal system here and how it might apply to them, particularly in the context

of probate wills, inheritances. Thanks for joining us.

Oh thank you so much for having me on and it's a real honor to

be here. You've a great podcast so I've enjoyed listening to it.

It's nice to be a guest. Thank you. Oh well we're very glad

to have you. So my intro was brief. Tell us

a little bit more about yourself, how you got into the legal profession

and I suppose your role on a day to day basis. Yeah,

so I studied law. I qualified as a

solicitor in the Law Society of Ireland. I then

qualified in England and Wales and then in Northern

Ireland I studied arbitration and I have membership of the

Chartered Institute of Arbitrators. A few years ago I was appointed

by the Minister for Justice to the Classification of Films

Appeal Board and I'm a partner at Fitzsimons Redmond

llp. We are an all service law firm. We're based in Dublin

too. And we look after both business clients and

individuals and we look at commercial,

residential, tenancy, establishing business, all that comes with running

a business. And we look after personal matters like

family law, estate planning, everything like that. So

we aim to have a, an all round service for our clients. They can come

to us at one thing and we'll look after everything for them. Wow.

It's interesting because, you know, I often say when I speak to clients that

tax issues tend to arise when, as a consequence of big life

events. So I'd imagine that's your experience as well, is it?

That you would maybe work with a client from when perhaps they're young and they

set up a business right up until maybe their estate is being

discharged. Do talk us through kind of the main scenarios. You

find yourself working with individual clients and how that might apply to

our listenership. Yeah, so we,

our clients are so varied. A lot of people will come to us for the

very first time when they are buying their first home

and then they might come back to us if they're starting a business, if

they're making kind of big changes in their lives, we will be

there to help with all of that. And so we find

that once we establish a relationship with clients, you know, there's

a number of us in the firm between our experience and expertise, look after

all their different needs. We have clients who come to us

then later in their journey they might, you know, be coming up

towards retirement or selling out of their company or something like that

and they need, they need advice at that point. We're happy

to jump in there and advise them. We work with

foreign embassies which are established in Ireland. So

they're really nice clients to work with. They have particular needs and kind of

balancing the law of their dispatching state and the

laws and customs in Ireland. And that's similar where

we have a couple of international companies who kind of have the same kind

of competing laws. And

then we would work with individuals who are moving back to Ireland after

many years or who are moving to Ireland for the first time. Whether

that's because of a life change or a business

situation or a new job, we can help guide

them through all of the challenges and obstacles that might arise in being

in a new location. Actually, this probably leads me nicely into one

of the questions I wanted to ask you. I'd use my own experience because

the question is pertinent for my Own my own respect as

well. We are. Our first home that we bought was in Australia. And

my experience was that the legal system in terms of buying

a house, mortgaging a house, it's quite

standardized and there's set time limits under the

Australian standard process. A lot of clients, when they come to us,

whether they're returning Irish expats or moving here for the first time, they're

interested and sometimes shocked at how the legal system in

Ireland works. When you buy a house. Can you talk us through

generally what happens when you purchase a home

in Ireland? Whether it be that you know from when the offer is accepted,

let's say, until you actually get the keys and the role that a sister

might play in that. Yeah, it's. It's interesting because I think that

is probably the biggest cultural shock that people from outside

of Ireland experience, that the process is very. How long

is a piece of string really? So once you put an offer on your

house, then you're going and you're getting

surveys on the house, making sure that it's structurally okay,

that it's compliant with all of the building regulations and all of that, and

that it's safe to live in. And then there'll be an exchange of

contracts which happens kind of simultaneously to apply for your mortgage

or getting a mortgage, selling to offline as well. Then

there's kind of a period where the solicitors are working in the

background, exchanging documents and making sure the titles of

the property, the trail of ownership to the property

is in order, but it can be a long time.

During that period, we're also providing documentation to the bank. So the

bank that are satisfied that their investment is

safe and it can go on for an indefinite

period, really. Like there can be lots of delays

and it's not as rigid as in other countries where if

something's getting quite delayed, you know, almost automatically a

notice will serve to say, hurry up and get these over to me immediately.

There is that mechanism in Irish law. I don't think I've ever seen it used.

And just to kind of, I suppose expand on that,

what does exchange of contracts mean when you said that there, what does that mean,

practically speaking? Ah, yeah. So when you make your offer on the

house, you're not actually tied into the deal as yet. You'll pay

part of a deposit, I suppose not even your main deposit. You might pay

10%, the estate agent, and that's just to hold the property for you.

So they don't take offers from other or accept offers from other people. But

until you've actually signed the contracts, you're not tied in, neither side is

tied in. So at the point of signing

the contract you will exchange the balance of the

10% and then, then you're tied

in and you're stuck with the contract. I suppose both sides

are okay. So that's kind of the point of no return, let's call it. That's

exactly it. And at that point you have to be satisfied that you have your

mortgage monies because you could end up in a very difficult situation where you're

obliged to fulfill the contract and the bank has

decided not to give you monies for whatever reason. Yeah, of course,

of course. So I think that's interesting is, you know, the takeaway there is whether

you're buying a house in Ireland for the first time as an Irish person or

someone coming from another location where maybe you've had a mortgage there, the

process isn't as set in stone brightly around

me. I often say to clients, and that's probably not

shocking giving the fact that our land law is quite archaic

compared to some newer countries, let's call it. But

is there anything you'd suggest to somebody if your

friend comes to you and says, lisa, I'm thinking of buying a house? What are

the things as a legal advisor or sister in Ireland that

you're cognizant job or if you were buying a house, what are you watching for

to kind of help the process move along as quickly as possible? Well, I

think you can only control what's in your own sphere.

So I would always tell people, you know, before you even put an offer on

the house, make sure you've sat down with a financial advisor and you have

your finances in order. That's when you go into the bank for your, for your

loan, that there's no problems there. Make sure that you're

in a position where you can get your life assurance in place.

Because for some people that can be a problem if they've had pre existing illnesses

or anything like that. But other than that I think it's kind of

manage the expectations, expect to be

outbid on houses. When, you know, when you see a price,

a for sale price, that's not the price that the house will be sold for.

It's a very competitive market. So yeah, you

will be outbid a lot of times. So don't get too attached to

any one property if at all possible. And then it's a matter of,

I mean keep the pressure on your solicitor, keep the pressure on the estate agent

as well. Like there's you know, you want to keep your case at the top

of everyone's agenda. So you can do that without being, you know, you don't

touch the phone every day, but gentle pressure, you know, if you feel like

you haven't heard, you know, make that ask. Not

that work isn't being done like work is often being done in the background. You

just don't, you know, you're not being told on a step by step basis, but

it's often is happening. And when you ask, you can feel a lot more

reassured. Yeah, it's because it's an emotional thing, isn't it, buying the

house and particularly when you've just made a

move. It brings me then, I suppose, to my next question. Can you give

us a quick rundown the 101 basic for

people who perhaps are not familiar with the way that

succession law works in Ireland? So, you know, we kind

of charting the journey of someone coming to Ireland, buying a house now they

own an Irish asset. What are the issues they need to think about and maybe

just even through the lens of just generic. And then we can talk maybe about

the international aspects as a secondary issue. Yeah. So I

suppose if a person, very broadly, if you

have an Irish asset and it's a real property, it's a

house, it's an apartment, it's a building, it's a field that is going to be

dealt with under Irish inheritance law,

99.9% of the time you need to be making a will in

Ireland, it becomes very messy if that property is being

dealt with under Irish law with a foreign will or

with no will at all, the best thing to do is make a will. In

Ireland, our succession law is, I mean, I think

it's probably less complex than in other jurisdictions,

certainly far, far less complex than in the United States

where, you know, everything is dealt with under a trust and we

don't use trust very often. So, yeah, things are dealt

with under, you know, a will can be 3, 4 pages, 2, 3 pages often,

and that's sufficient. The things to consider, I suppose we have no

forced inheritance rules per se. If you're married

and your spouse is entitled to one third of your estate, they can

renounce that. If you have children, you have a duty

to provide for them according to your means, whether that's in your

lifetime or by meal. So that's kind of very

broad and I suppose that's not

set in stone about how you would do that at all. So

often it doesn't impact people too much as long as they are Being

fair about how their description, their assets.

You'll know this very well. The tax provisions means it's not most

advantageous to benefit your spouse and secondarily

most advantageous to benefit your children in Ireland, from a tax point of

view. And then when we have people coming from other jurisdictions

that it's important that we link in with their planning solicitor,

lawyer in their other jurisdiction so that their

overall estate plan is harmonious. We always have to be

really careful that the wording of a will in Ireland and the

wording of a will in the other jurisdiction don't

unintentionally provoke each other, which can happen.

I speak for Ireland, but a foreign will can be valid

in Ireland if it meets the criteria of the

Succession act, which means a foreign will can revoke an Irish will

without even trying to. Yeah. And that can give rise, I

suppose, to both unintended consequences in terms of who

benefits from it. But. But I suppose from my perspective, from a tax perspective,

one of the things that we would generally see, just to kind of add to

what you said, there is, you know, let's say somebody has worked

with a sister and drawn up an Irish will to pass, for example,

the family home. If they inadvertently pass the full

estate under that will, because they have, for example,

revoked the foreign will, they've inadvertently brought the whole estate into the Irish

tax net because assets passing under an Irish will are always subject to Irish

inheritance tax. So it's the value of

understanding. And even just down to that, like one line in a

document that hasn't been thought about, can, can, can really

warrants attention. I'm sure you, you see that with

clients who are coming back from abroad that, you know, this is an area that

when everything settled and the move and the house has been bought, let's sit down

and think about it. Is that something you would encourage your clients to do?

Absolutely. I came in quite late to a

case where someone who was an Irish,

an Irish national domiciled in an African

country. Don't want to give too much details on a flying case, but

they had an Irish will and two days later

made a will in that African country which revoked

the Irish war. He

obviously at the time was like, I'll get all my affairs in order within this

week. I'll get it all done. But the intention was completely different. There were people

he had intended to benefit under the Irish will that

suddenly found themselves under the African country will.

And, yeah, there were people I had to have the conversation

with to tell them, yes, you're named in the will? No, you're not inheriting.

Wow. Okay, so what

happens then? Assuming you have

taken advice, you have reviewed your

portfolio to determine what wills are required and to

summarize, what I think you're saying is that if you have Irish assets, you

do well to have an Irish will. If you have foreign assets, is

it too broad to say you do well to have a foreign will as well?

Is that too broad a comment? No, I mean, I don't think so. I

think you should have a foreign will. As a general rule, if you have a

foreign asset, you want to have a will in that country. But

I'm always happy to have a conversation with the solicitor

in the foreign country and a conversation with yourselves as well,

Stephanie, or you know, or other tax professional

as to, you know, what's the best way to deal with it.

Because I can't advise on how things work in Spain

or the US or anything like that. So it does involve like a

professionals talking to each other and putting the knowledge together and figuring

out how this works for this individual. Because they're all

individual cases. No two are alike. I completely agree.

And it always seems to start with the question of, you know,

what does the client want? And then we work backwards. There isn't

necessarily cookie cutter solutions to these cross border issues,

whether it be legal or tax. That's

exactly. Yeah. There might be routine ways we do. Things, but

working backwards, you know, we know the outcome we want. So how do we get

there? Talk me through High level.

If we have a scenario, let's use a common scenario

that we would find, and I think the majority of the listeners to this episode

will kind of will resonate with them. Let's look at the scenario where, for

example, we might have a UK state

and an Irish estate. Well, one estate with

Irish and UK assets and two wills when

the executor or the family members need to go about taking action.

What issues? What do you want to know? When do you want to hear from

people in these scenarios to do your side of it? And what

does that look like when we have assets in two

jurisdictions? I ideally want to hear from someone

before they've died because that's the only time we

could fix any problems that could arise. But

the things we're looking for, I suppose are that what

assets fall under what will is the main thing. Ideally

in those kind of situations you can have the two probate processes happening

simultaneously. So you'll make your application in the uk, you'll make your

application in Ireland, and if it's even if it's often, it's

usually the one executor is dealing with both. But they're

not waiting a year. Probate process takes a year here.

From what I've seen, it seems to take similar time in the uk. So you're

not waiting, you don't have to wait for one to finish to commence the other.

If everything's done under one, will you. Do we have to decide which

is first? Yeah, that, I mean which assets

fall under which estate, which in relation to real

property, houses, apartments, land, all of that is clear

cut. But then you're looking in relation to things

like bank accounts, it mightn't be as clear cut. Shares can

often be one that people don't even realize they have an asset in

a foreign jurisdiction. Yeah. And actually side point

there, you'll have come across this, I suppose potential issues there as

well as I understand it, around, you know, the

amount of assets that can be left without the US potentially trying to

levy tax on US assets. Green, particularly when it's

a non US citizen that is essentially investing. This

is a common problem now that, you know, people can so easily invest

on something like a Revolut app, you know, and if something happens such that you

know they have left that asset, what are the tax consequences of that? It can

really get complicated because really what you've just alluded to

is a tripartite in that scenario where you've got

us UK and in our example Irish as well,

issues ongoing, it starts to get complicated, doesn't it? And it does. And

that's, I mean think that's life. People move around, you know,

probably more than they did in previous generations

and people are more financially, I suppose, confident as

well, you know, in, in this generation, they will

invest in different and interesting

things. Whether that's like cryptocurrencies, I haven't had to deal with that in

a. Inappropriate yet. Goodness forbid.

Yeah. Where is the key? Yeah,

so yeah, it's, you know, it's, it's, it's, it's always a movable

thing. Like there's always going to be new challenges for us to figure out and

to, to solve. And I think as well, you know,

the interesting point I make is I would

see potentially in the scenario we used of our Irish

uk and you've just basically said you could have an Irish probate process

ongoing, a UK one ongoing, that are two separate wills to

add complexity to it. You actually have two tax

issues as well, ongoing. Because you have an Irish

will with an Irish inheritance tax consideration. You have a UK will, with

the UK estate tax considerations noting as well recent changes there

in the UK where we have shifted or are about to. I'm not sure if

it's been written into legislation at the time of recording this, but we're going to

shift from a domicile basis to a residency basis with some

rules there around interim periods. So you now

also probably need tax advisors and

we would often find some sisters will double up and do both tax and

legal. But there is essentially, you know, a

consideration from a tax perspective. We have a treaty with the uk, but we need

to understand what taxes are in the UK if we're going to

credit them against certain assets, broadly UK situous assets. If

Ireland's going to apply a tax it's complicated. That's it. Because

it's never straightforward. One thing about taxes, it

seems to be it has been written in every jurisdiction to be as complicated

as it possibly can be. Yes,

feels like that sometimes. So yeah, we will often

be advising clients that they need a tax professional on a case if it

gets in any way complex because you need to get it right.

There's no way around that. So when you're, when you're sorting things out. But

it's always best when you're planning it to have the tax professional

conversation as well.

Thanks for listening to Tax Bites. For Expats, please do leave a

rating or review wherever you listen to your podcast. And as

always, remember to take professional tax advice specific to

your personal circumstances before acting or refraining from

action in connection with the matters dealt with in this series.

The material in this podcast is intended to give general guidance only.