Inheritance issues relating to Bulgarian property
The means by which you buy your home in Bulgaria ie whether you buy as an individual or as a limited liability company, can greatly impact on who inherits your Bulgarian property investment. Whether you live permanently or not in your property in Bulgaria can also affect your right to share out your assets as you wish.
It is a complicated area and professional legal advice should be sought from specialists in Bulgarian law.
You own Bulgarian property but you reside in the UK
- You bought property in Bulgaria as a company. Your company shares would pass in accordance with UK law because you do not live permanently in your Bulgarian property, so you can pass your estate to whomever you wish. However, your heirs would have to follow Bulgarian Commercial Law in order to become shareholders.
- You own property in Bulgaria in your own name. If you bought your Bulgarian property in your own name (ie not as a limited liability company), UK inheritance law will apply so you can pass your estate to whomever you wish.
You bought Bulgarian property and reside in it
- You bought your home in Bulgaria as a company. In this instance, both Bulgarian inheritance law and Bulgarian Commercial law would decide who would inherit your Bulgarian property.
- Your bought your home in Bulgaria as an individual. Your property in Bulgaria would pass to your heirs according to Bulgarian law.
Naming an heir to your property in Bulgaria
Your home in Bulgaria will (subject to the limitations imposed by Bulgarian law) be dealt with according to any instructions you leave in a Will, whether this is a Bulgarian or UK will.
However, if you have been living permanently in your Bulgarian property, Bulgarian law imposes restrictions on your freedom to choose your heirs in your will. You cannot displace what Bulgarian law considers to be your rightful heirs when sharing out your property in Bulgaria.
Intestacy and your home in Bulgaria
In the absence of a will, your Bulgarian property and other assets will pass to your heirs according to a formula based on levels of closeness to you. In the first level are children. Second in line are parents. The third level includes siblings and grandparents while the fourth level includes uncles, aunts and cousins. Any surviving spouse inherits together with heirs in levels one to three.
Inheritance taxes on Bulgarian property and other assets
Inheritance taxes changed in 2005 and are payable by residents and non-residents alike on property in Bulgaria. Spouses and direct relatives are exempt from tax if they inherit Bulgarian property or other assets no matter what their value. Siblings, nieces and nephews who inherit a home in Bulgaria receive a tax free allowance of 250,000Lv but pay a tax of 0.7% on any higher value. Other beneficiaries pay an inheritance tax of up to 20%.
