Succession in Cyprus
The Forced Heirship Rules
According to the provisions of the Wills and Succession Law/Cap. 195, a segment of the estate
of the Testator must be reserved for his/her heirs on the basis of the forced heirship rule. The forced heirship rule applies to the estate of persons who at the time of their death, were domiciled in Cyprus irrespective of nationality.
For the purposes of this article the term Domicile the status of being a permanent resident in a specific jurisdiction.
It is to be noted however that Regulation (EU) 650/2012 allows EU citizens to choose the law of their country of nationality as the law applicable to their estate. Such a choice must be expressed in the will of the testator.
The forced heirship rule applies to everyone who dies domiciled in Cyprus irrespective of nationality. However, Regulation (EU) 650/2012 allows EU citizens to choose the law of their country of nationality as the law applicable to their estate. Such a choice must be expressed in the will of the testator.
Segment of the Estate not being subject to the Rules of Forced Heirship
The disposable segment of the estate of the Testator which is not subject to the forced heirship rule can be disposed of of as the Testator sees fit.
Where a person dies leaving a spouse and a child, or spouse and descendant of a child, or no spouse but a child or descendant of a child, the disposable portion must not exceed one-fourth of the net value of the estate.
When a person dies leaving a spouse or father or mother but no child or descendant of a child, the disposable portion shall not exceed one-half of the net value of the estate.
When a person dies leaving neither a spouse, nor a child, nor a descendant of a child, nor a father, nor a mother, he/she is free to dispose as he/she wishes all of the estate.
In the event that the Testator disposes more than the Disposable Segment of his/her estate, the Will, will is not void but the disposition will be reduced in order to be limited to the disposable portion.
Applicability of Succession laws
A Will made outside of Cyprus may be valid in Cyprus provided that it was executed in accordance with the formalities stipulated by Cyprus law. Further, a Will can be accepted by Court if it has been executed according to the the conditions of the Hague Convention.
Cyprus succession laws are applicable on any immovable property situated in Cyprus irrespective of the nationality or domicile country of the deceased.
Cyprus law is not however applicable to any immovable property situated abroad even when the deceased person in question was domicile in Cyprus.
Movable property such as money, cars, etc are governed by the laws of the domicile of the deceased at the time of death. Thus, if the deceased had a foreign domicile, the laws of his/her country will regulate his movable property in Cyprus. Likewise, a person who passed away having a Cyprus domicile, his movable assets abroad will be governed by Cyprus law.
Formalities and Validity of Wills
In order for a will to be valid .the following formalities must be adhered to:
• The will must be signed by the testator or a person authorised by him/her in the testator's presence and under his/her directions.
• The testator must sign in the presence of at least two witnesses who will also sign the will in the presence of each other and in the presence of the testator.
• Each page of the will must be signed or initialled by the testator (or his representative) and the witnesses.
It is not compulsory that a will must be filed to Court. However, it is advisable that a will is filed to Court as to ensure protection of the document of will.
Terms of the Will
Cyprus law imposes restrictions on the way property can be disposed through a will, through what is referred to as forced heirship, which means that certain heirs, such as a spouse or children cannot be excluded from an inheritance and they have a right to receive a fixed minimum percentage of the estate of the diseased.
Distribution of the Estate where the Diseased has left no Will
When a person dies intestate, his/her property will be distributed on the basis of the rules of intestacy. There are four different classes of kindred who are entitled to inherit an intestate person:
First class: Legitimate children of the deceased and descendants of any of the deceased's children who died during his/her lifetime;
Second class: Any parent or sibling of the deceased;
Third class: The closest in degree of kindred living ancestors of the deceased, such as a grandparent;
Fourth class: The nearest relatives of the deceased alive at the time of his/her death up to the sixth degree of kindred (i.e. cousin and siblings of grandparents).
The portion of the spouse is calculated first and then the rest of the estate will be distributed to the relatives of the deceased depending on the degree of kindred. Members of a class exclude the members of the next class.
The share of the surviving spouse is as follows:
Where the deceased left a child or a descendant of a child, the spouse's share is equal to the share of each child. For example, if the descendant was survived by a spouse and 2 children, the net estate (after the debts of the estate have been paid) will be divided in three equal shares.
Where the deceased left no child or descendant of a child but has an ancestor or descendant of an ancestor within the third degree of kindred, the spouse is allowed 50% of the net estate.
Where the deceased has left a relative within the fourth degree of kindred, the spouse is entitled to 75% of the net estate.
Where the deceased left no relative within the four degrees of kindred the spouse is entitled to the entire net estate.
Revocation or Challenge of a Will
A Will may be revoked by another will.
Additionally, a Will can be deemed to have been revoked where the testator’s family circumstances have been altered, i.e. he/she has entered into matrimony or has children.
A Will can be challenged in court on the basis that the testator lacked mental capacity or that he signed the will as a result of undue influence.
Administration of the Estate of a Deceased Person?
If the deceased person has left a Will, t the executor of the Will applies for a grant of probate.
If there is no WIll, a close relative of the deceased such as a spouse or a child can apply for the letters of administration. It is common for a lawyer to apply for the letters of administration through the use of a power of attorney from a close relative of the deceased. The intended administrator has to file to Court together with the application a number of documents such as a death certificate, a certificate of heirs and other documents. When the letters of administration have been obtained, the intended administrator must collect all information in regards to the assets and liabilities of the estate and file statements to Court declaring the assets and debts of the deceased and to inform the Court about the course of the administration procedure.
Further, the administrator must pay any taxes due to the authorities, such as income tax or tax for immovable property and obtain discharge from the tax authorities. After obtaining discharge from the tax authorities the administrator can distribute the estate to the beneficiaries and file to Court final accounts and close the administration.
Renouncing of inheritance
An heir can renounce his/her inheritance by making a declaration to this effect and file the declaration within three months from the date when he/she found out about the death of the deceased and the fact that he/she is an heir of the deceased.
Inheritance tax in Cyprus
There is no inheritance tax under Cyprus for people who passed away after year 2000 when inheritance tax was abolished.