INDIA Law and Practice Contributed by: Rishabh Shroff, Kunal Savani and Chirag Shah, Cyril Amarchand Mangaldas
12. Cross-Border Succession Planning 12.1 Taxation of Cross-Border Estates and Transfers There is no estate tax currently being levied in India and nor are there any indications that any such estate tax will be introduced in India. However, it is noted that Indian families usually have some tax exposure in other jurisdictions, especially in US or UK where the estate laws are wider. Accordingly, Indian tax advisers must co-ordinate with foreign tax advisers to evaluate such tax exposures and suggest mitigating steps.
When a foreign national dies while domiciled in India with Indian assets, or an Indian domiciliary has foreign assets – Indian courts follow the domicile principle wherein the law of deceased’s domicile governs suc- cession to movable property and lex situs or the law of the land governs immovable property. Indian courts have not recognised same-sex marriag- es, even if validly contracted abroad, for succession purposes. Foreign same-sex spouses have no auto- matic inheritance rights under Indian personal laws. Similar rationale applies to civil partnerships that are validly recognised abroad. To circumvent the uncertainty rendered due to con- flicting laws across the world, high net worth individu- als with multi-jurisdictional assets execute separate wills for assets in different countries – the Indian will governs Indian assets under Indian law and the for- eign will governs foreign assets under lex situs. Offshore trusts holding Indian movable assets would be administered/governed by trust jurisdiction law rather than Indian personal law, subject to the provi- sions of the trust deed.
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