Cross-Border Succession : Foreign Assets Of An Indian Resident

INTRODUCTION We continue with our theme of cross-border succession planning. Last month’s Feature, examined issues in the context of a foreign resident leaving behind Indian assets. This month we explore the reverse situation, i.e., succession issues of an Indian resident leaving behind foreign assets. In the age of the Liberalised Remittance Scheme (LRS) of the RBI, this has become a very important factor to be considered. APPLICABLE LAW OF SUCCESSION The first question to be addressed is which law of succession applies to such an Indian resident? Here the Indian Succession Act, 1925 would not be applicable. The relevant law of succession of the country where the assets are located would apply. It would have to be seen whether that country has a law similar to the Indian Succession Act which provides that succession to movables is governed by the law where the deceased was domiciled and succession to an immovable property is governed by the law of the land where the property is located. For instance, England has a law similar to India. There are two basic legal systems in International Law ~ Civil Law and Common Law. Certain Civil Law jurisdiction countries, such as, France, Italy, Germany, Switzerland, Spain, Japan, etc., have forced heirship rules. Forced heirship means that a person does not have full freedom in selecting his beneficiaries under his