Neocleous
English Greek Russian Ukrainian
  • Neocleous

Beware - your will may no longer achieve the outcome you intended

A recent change to the Wills and Succession Law has important implications for many British people and nationals of other Commonwealth countries with immovable property in Cyprus.

Like many countries in the world Cyprus has a “forced heirship” regime. Section 41 of the Wills and Succession Law, Cap 195, sets aside a specified proportion, known as the statutory portion, of a deceased person’s estate for close relatives. The statutory portion must be passed to the relatives concerned and cannot be disposed of by the individual’s will.

For example, if an individual dies leaving a spouse and a child, three-quarters of the value of the estate is reserved for them and divided equally between them. Only the remaining quarter of the estate can be disposed of by the individual’s will.

Forced heirship arrangements are alien to English law, under which people are free to dispose of their property exactly as they wish, with almost no constraints. British couples with immovable properties in Cyprus customarily make “mirror” wills regarding the Cyprus property, with each leaving his or her share of the property to the other.

Prior to July 2015 British citizens and citizens of most former British colonies (excluding Cyprus) were exempt from the forced heirship provisions. However, Law 96(I) of 2015 withdrew this exemption and the forced heirship provisions now apply to anyone who dies domiciled in Cyprus and to the succession to any real estate located in Cyprus, regardless of the domicile of the deceased person.

What this means in practice is that the individual referred to above (say the husband for simplicity) with a spouse and a child, who had made a will leaving his entire share of the immovable property in Cyprus to his widow, will find that his child is now unexpectedly entitled to a substantial share of the property. Specifically, if the husband and wife own the property in equal shares prior to the husband’s death, instead of the wife owning the entire property following her husband’s death as intended, she will own only thirteen-sixteenths. This is because she will inherit only five-eighths of her husband’s share, and the child will inherit the other three-eighths. If the individual is deemed to have acquired a domicile of choice in Cyprus, the entire estate is affected, not just the immovable property.

These unforeseen changes, which also affect shares in Cyprus companies, can give rise to considerable difficulties at the best of times, but if relations between the surviving individuals are not good the effects could be calamitous.

There are a number of ways in which the status quo ante may be restored and freedom to dispose of one’s property as one wishes can be regained, depending on individual circumstances. We strongly advise anyone potentially affected by the changes to take specialist legal advice at the earliest opportunity.

For further details please contact Christos Vezouvios or your usual contact at Andreas Neocleous & Co LLC.