- What tendencies, innovations take place today in foreign inheritance laws? Does it have, for some extent, influence on your work with foreign estate matters?
- We always try to hold hand on the pulse and keep constant monitoring, since lack of knowledge of this or that innovation in foreign inheritance laws may lead to a selection of erroneous legal position in a specific case. There are changes in inheritance laws of foreign countries. There is a tendency during the last decades in the "continental" and "English-American" systems of law to expand the inheritance rights of spouses and to equalize the rights of adopted and illegitimate children with the legitimate ones, and in the countries of the former USSR - a tendency to expand the circle of heirs at law. For example, in Russia on the 1st of March 2002 the Part Three of the Civil Code came into force establishing eight orders of priority of heirs at law (formerly there were but two) providing the right to inherit in certain cases to the following relatives of the deceased: uncles (aunts), great grandfathers (great grandmothers), children of cousins, etc., and even the stepsons (stepdaughters), fathers-in-law (mothers-in-law), dependants. By the way, we expect something like that here in Ukraine, when the new Civil Code of Ukraine will come into force, providing for five orders of heirs at law, a bit less than in Russia.
- Are estate taxes abroad large and is a foreign estate taxable when transferred to Ukraine?
- As a rule, taxes are large. Their amount, in a majority of cases, depends on the value of the estate and the degree of kinship of heirs. For example, in France, the tax may reach 60% of the estate amount. In USA there is the federal estate tax and estate taxes in some states of USA. The federal tax is payable before distribution of the estate assets among the beneficiaries and vary from 37% in case the estate is up to 600 thousand USD to 55% when the estate exceeds 3 million USD. In case the value of the estate is less than 600 thousand USD the federal tax is not payable.
At present there is no inheritance taxation in Ukraine. Pursuant to the Decree of the Cabinet of Ministries of Ukraine "On income tax on citizens" of 26.12.1992 the estate funds are not included to the cumulative taxable income and are not taxable. It also applies to the estate funds coming from abroad. This situation may change since certain projects of tax codes are under consideration in Verkhovna Rada providing for various ways of inclusion of inheritance funds to the cumulative taxable income. In the event of approval of any of the above projects the destiny of a certain foreign estate amount as to taxation will depend on whether double taxation could be avoided pursuant to the appropriate agreement between Ukraine and the country of estate matter.
It is also interesting that the problem of estate taxation may have a political undertone and is used to achieve certain political goals. For example, President of the USA George Bush promises to liquidate the inheritance tax before 2009. The same was promised during presidential elections in France by Jean-Marie Le Paine.
- Do foreign estate matters have any future? Will they increase or decrease in number?
- My forecast is rather pessimistic. It may be five say ten years that estate matters would keep in quantity, but then there will be a drop. But I am optimistic as to the future of other civil matters with "foreign element", and especially in the sphere of marriage and family relations.
- Are there any foreign civil matters you refuse to handle for some reason?
- Yes. These are matters of international adoption. Here we take into consideration both the laws prohibiting intermediary activity in adoption (p. 11 of the Decree of the Cabinet of Ministers of Ukraine of 20.07.1996 No. 775, Article 216 of the new Family Code of Ukraine to come into force on the 1st of January 2003) and the moral and ethical side of this problem.
We do not handle matters of compensation to "Ostarbeiters". If some of them apply to us in writing or personally for a consultation, or with a request to receive a document from archives, we do this work free of charge. As far as we know, the Ukrainian National Fund "Understanding and Reconciliation" also renders assistance to these people free of charge. In general, the main point in this issue is that the state learns a lesson from the previous sad experience with "Gradobank" and does everything to guarantee the receipt by the addressees of compensation amounts.
