Inheritance Tax and Succession Planning for Ski Property Buyers

The chalet is the easy part

A family ski property is often emotionally important but financially awkward: high-value, illiquid and difficult to divide between heirs. That is why inheritance planning needs to happen before completion, not after the owner dies.

A ski property cannot be partially sold to settle a tax bill. UK IHT is generally due six months after the end of the month of death. Some property-related IHT may be payable by instalments, but families still need enough liquidity to deal with tax, legal costs and administration before the estate can be fully settled.

Add a second jurisdiction (forced heirship rules, a foreign probate process, currency exposure) and the family that should be on the slopes ends up in lawyers' offices in two countries.

UK inheritance tax does not stop at the Channel

The most common misconception among overseas buyers is that property held abroad sits outside UK IHT. It does not.

For long-term UK residents (LTRs), worldwide assets fall within scope at the standard 40% rate. The chalet in Verbier, the apartment in Niseko, the farmhouse in Tuscany: all of it counts.

From 6 April 2025, His Majesty's Revenue and Customs (HMRC) replaced the older domicile and deemed-domicile rules with the long-term residence test. An LTR is anyone who has been UK tax resident for the previous 10 consecutive years, or for any 10 years within the previous 20.

The standard nil rate band (NRB) is £325,000 per person, frozen until April 2031. The residence nil rate band (RNRB) of up to £175,000 applies where a main home (or its proceeds) passes to direct descendants.

The RNRB tapers by £1 for every £2 above a £2m estate. It is fully lost at £2.35m for a single £175,000 RNRB, or up to £2.7m where a full transferable RNRB is available for a couple.

Whether the full £1m couple's allowance is achievable depends on the makeup of the estate: it is a ceiling, not a guaranteed figure.

Leaving the UK does not immediately end the liability. The LTR tail can run for up to 10 tax years after departure. A buyer who sold their London home in 2024 and moved to Verbier could still face a UK IHT bill on the Swiss chalet for up to 10 tax years after departure.

What the numbers actually look like

A common planning shortcut is the 40% rule of thumb: assume the IHT exposure is roughly 40% of the asset value before allowances. The figures below are illustrative only. Reliefs, spouse exemptions, and the RNRB can reduce them; the freeze on allowances until 2031 will not help.

The RNRB may bring the bill lower for some estates, but only where the buyer's main UK home (or the proceeds of one) passes to direct descendants. For owners whose qualifying UK home has been sold, or whose main home does not pass to direct descendants, the RNRB may be reduced or unavailable. This needs checking against the full estate.

Why your Brussels IV election may not protect your French chalet

Brussels IV is the EU succession rule that can allow someone to choose the law of their nationality in their will. Its formal name is EU Regulation No 650/2012.

By default, the law of the deceased's last habitual residence governs the whole estate. A person can override that default by electing the law of their nationality, in a will, to apply to their entire succession.

UK nationals routinely use this provision to elect English law and disapply local forced heirship rules. The election does not cover tax: inheritance tax remains a matter of each country's domestic law.

For assets in France, the election may no longer do what most buyers think it does. France amended Article 913 of its Civil Code in August 2021, with effect from 1 November 2021, to introduce a new rule.

France introduced a compensation right known as the droit de prélèvement compensatoire, or DPC. In plain English, it can allow a child to claim compensation from French assets if the will leaves them with less than French reserved-heirship rules would have given them. The DPC applies where:

(a) the deceased or at least one child is an EU national or habitually resident in the EU at the date of death, and (b) the foreign law elected under Brussels IV provides no equivalent forced heirship protection.

French réserve héréditaire reserves a fixed share of the estate for children: one-half where there is one child, two-thirds where there are two, and three-quarters where there are three or more. Recent French adviser commentary suggests that relying on an English-law election, or an SCI (the French civil property-holding company traditionally used for cross-border ownership), may no longer be enough to avoid French forced-heirship exposure where French property and EU-connected children are involved. This needs French legal advice before completion.

The European Commission has received complaints arguing that Article 913 conflicts with Brussels IV. As of April 2026, no European Court of Justice ruling has resolved the point.

Forced heirship at a glance: six markets

Reserved-share rules protect certain heirs, usually children or a spouse, by giving them a minimum share of the estate even if the will says otherwise. The systems vary by who is protected, what fraction is reserved, and whether the EU Succession Regulation applies.

Switzerland: what the January 2025 PILA reform changes for foreign buyers

Switzerland's January 2025 PILA reform gives foreign nationals living in Switzerland for succession-law purposes more scope to elect the law of one of their nationalities in a will. The effect depends on nationality, domicile, drafting and any protected-heir issues, so Swiss advice is needed before relying on the election.

Until the end of 2024, Swiss succession law applied by default to foreign nationals living in Switzerland for succession-law purposes. From 1 January 2025, the revised PILA (the Federal Act on Private International Law, the Swiss equivalent of Brussels IV) lets such a person elect, in a will or contract of succession, that their estate be governed by the law of one of their nationalities. They can also submit the estate to the jurisdiction of their home country's authorities, removing the burden on Swiss courts to apply foreign law.

For a UK national living in Verbier, the practical effect is that an English-law election in a Swiss will can now be properly recognised. Swiss authorities may then apply English succession rules to the estate, subject to the points above.

The reform does not automatically eliminate forced heirship. Swiss Pflichtteil (reserved-share rights for close family members) rules can still apply to heirs the law protects, usually a spouse or registered partner, children, and the descendants of predeceased children. The reserved share is half of what the heir would have received if there were no will.

The election must be express in the will: an implied choice will not work, and without an express clause Swiss law applies by default.

Lex Koller, the Swiss law restricting foreign ownership of residential property, also matters. Foreign nationals and foreign-controlled companies face restrictions on Swiss residential property ownership, so a company structure is not a simple workaround. The authorisation position is decided locally and should be checked before purchase.

Austria, Italy, Japan, and Andorra: what buyers need to know

Austria

No inheritance tax. Austria abolished inheritance tax in 2008. Buyers should still budget for property transfer tax and land register fees: the Grunderwerbsteuer (real estate transfer tax) runs at 3.5% of assessed value, and the Eintragungsgebühr (land register fee) at 1.1%.

Austria participates in Brussels IV; UK nationals can elect English law in their will.

Pflichtteil reserves half of what they would receive if there were no will, for children and the surviving spouse or registered partner, and the entitlement can be reduced where there has been no close family relationship for around 20 years.

Italy

Italian inheritance tax is comparatively low: 4% for spouses and children above an exemption of €1,000,000 per beneficiary; 6% for siblings above €100,000 per beneficiary; 6% for other relatives up to the fourth degree (no exemption); 8% for unrelated parties (no exemption).

Real estate is taxed on the valore catastale (cadastral value), which is typically below market value. Non-residents are taxed only on assets in Italy.

Italy participates in Brussels IV; UK nationals can elect English law via a choice-of-law clause. The Brussels IV election does not remove the need to check Italian reserved-share rules for Italian property. The reserved-share fractions vary by combination of heirs and Italian legal advice from a notaio or avvocato is required for individual circumstances.

Japan

Brussels IV does not apply: Japan is not an EU member state and Japanese courts use their own private international law rules. Iryūbun (the Japanese reserved-portion system) protects spouse, descendants, and ascendants, but not siblings.

Reserved portions total one-half of the estate for descendants and/or spouse, and one-third where only ascendants are involved. Since a 2018 reform that took effect on 1 July 2019, iryūbun claims are monetary claims for the value of the infringed portion, not property claims for the assets themselves.

Foreign owners face two procedural points buyers regularly miss. First, non-resident foreign owners may need a Japanese tax representative for filings and notices; this should be confirmed with a Japanese adviser. Second, Japan's mandatory inheritance registration regime imposes a hard deadline.

Heirs who inherit Japanese real property must register the inheritance within three years of learning of it. For inheritances that arose before 1 April 2024, the retroactive deadline is 31 March 2027. The civil fine for non-compliance is up to ¥100,000.

From 1 April 2026, registered owners who change name or address must register the change within two years, with a fine of up to ¥50,000 for non-compliance.

Andorra

Brussels IV does not apply. Andorra has no inheritance or gift tax for residents.

The llegítima (Andorran forced-heirship system) reserves one-quarter of the estate for children, divided equally; in the absence of descendants, parents take the same one-quarter share. A recent reform placed the surviving spouse first in succession where the deceased has no children or descendants.

Andorra is also reviewing its rules on foreign real estate ownership: regulations approved in March 2025 limit foreign real estate investment, and further changes are under discussion. Specialist Andorran advice is required, and any new tax measure should be confirmed in writing with a local adviser before completion.

Wills, structures, and what the SCI no longer does for you

Two practical decisions sit between the legal framework and the actual outcome: how the will is drafted, and how the property is held.

Wills. A common professional approach for owners with property in two or more countries is to use separate local wills for each jurisdiction, drafted under local law and processed concurrently. The alternative (one UK will, translated, checked and processed through local legal systems) usually adds months and legal cost.

The key point is coordination: each country's lawyer must be aware of the other wills, because a poorly drafted later will can revoke an earlier one. The Brussels IV choice-of-law clause must be express; an implied election (for example, by referring to "trustees" or other English-law concepts) is possible but unreliable.

For French property the election alone may not be enough to address the réserve héréditaire problem and a notaire should review the structure before completion. For Switzerland the PILA 2025 election must be express, otherwise Swiss law applies.

An SCI should no longer be treated as a safe workaround for French forced-heirship exposure. It may still help with governance, co-ownership and lifetime gifting, but buyers should not assume it removes the risk of a French reserved-heir claim.

Historically the SCI was used to convert French real estate into movable shares, on the theory that movable shares for non-residents fall outside French forced heirship rules. The 2021 amendment to Article 913 changed the underlying legal landscape, and recent French adviser commentary suggests that holding through an SCI does not reliably prevent a child with an EU connection from pursuing a DPC claim against assets in France. French legal advice is needed before treating an SCI as succession protection.

Corporate ownership of personal ski property is generally not recommended: it complicates mortgage access, often without a succession benefit, and rarely overrides forced heirship.

Ownership structures. Direct personal ownership remains the most common starting point: simplest to set up, cheapest to run, easiest to mortgage, and the position from which forced heirship analysis begins. Bare ownership and usufruct (nue-propriété and usufruit) splits ownership between a bare owner and someone with the right to use the property, and is used in some family planning structures, especially in France and Italy; on the death of the person holding the usufruit the bare owner receives full ownership, often without French inheritance tax. The split does not exempt the property from forced heirship calculations.

The liquidity solution: life insurance written in trust

The IHT bill is not a future problem; it is a six-month problem. Beneficiaries cannot access the estate until HMRC is paid, and a chalet cannot be partially sold to fund the bill.

The realistic options without planning are: a forced sale at a discount, often at the worst time; borrowing against the estate, which is expensive and slow; or partial liquidation of other assets, possibly into a market low. All three reduce the value the family inherits.

Life insurance written in trust can help solve the liquidity problem, but it does not replace legal succession planning. A trust is a legal arrangement where the policy is held outside the estate by trustees for the benefit of named beneficiaries. The mechanics matter:

Without a trust, the policy proceeds pay into the estate and increase the IHT bill. With a correctly drafted trust, the proceeds are usually outside the estate and can normally be paid without waiting for probate. The trust form itself is typically free: most life insurance companies provide their own standard trust form which is submitted after the policy goes live.

Some insurers may pay quickly once the death certificate and required documents are received, but this should not be treated as guaranteed. Timing depends on the insurer, documents and policy setup.

Cover type is the opening decision: sole life, joint life first death, or joint life second death. For most married couples, where assets pass spouse-to-spouse on first death and the IHT event is the second death, joint life second death is the standard choice.

Duration shapes total cost: whole of life for indefinite ownership, or term (typically 10 or 20 years) where the liability is expected to reduce, for example through gifting.

Premium structure is the remaining variable: guaranteed premiums are higher at outset but fixed for life, while reviewable premiums start lower and typically rise materially over time. Guaranteed premiums are often preferred where long-term certainty matters, but the right structure depends on age, health, budget and ownership plans.

Two specialist policy types are worth knowing. Gift inter vivos policies are life insurance policies designed to cover the inheritance-tax risk on lifetime gifts, usually over the seven-year UK gifting period. Taper relief affects the tax on chargeable gifts, not the value transferred.

Gift inter vivos cover is particularly relevant for buyers currently in the process of gifting assets to children. Some universal life policies may build a surrender value after the early policy years, depending on product terms and investment performance. This can potentially be drawn for lifetime liquidity needs such as refurbishments, buying out a co-owner, or bridging a sale.

Choosing the right policy: a comparison

The five main policy types sit on a cost-versus-coverage spectrum. The figures below are illustrative only and are not quotes. Actual premiums depend on age, health, underwriting, sum insured, policy type and term.

Where to start: a practical sequence

The sequencing matters. Buyers who jump straight to the insurance question often find their adviser cannot price the policy properly because the underlying IHT and forced-heirship position has not been confirmed.

Next steps

If a ski property is part of your long-term plan, the inheritance side is best dealt with at the same time as the purchase, not afterwards. A clear UK IHT calculation, a country-specific succession review of the asset and the family's connections, and a trust-written life insurance policy sized to the liability are each worth addressing before completion. SnowOnly+ helps identify the planning gaps, understand your requirements and introduce you to the right legal, tax or wealth-management specialist.

If you would like a structured starting point, the Buying Readiness Assessment covers the planning gaps that most often cause delays at completion. For a personal life insurance illustration, contact SnowOnly+ so we can understand your requirements and introduce you to the right specialist.