Recognition of ownership of inherited property with a foreign element

To the notary. As a general rule, the inheritance procedure on the territory of Ukraine is carried out on the basis of the provisions of Chapter 84 of the Civil Code of Ukraine. But in case the presence of a foreign element is established in the process of inheritance. According to the provisions of paragraph 2 of part one of Article 1 of the Law of Ukraine “On Private International Law”, the concept of a foreign element is a feature that characterises private law relations regulated by this Law and manifests itself in one or more of the following forms:

at least one party to the legal relationship is a citizen of Ukraine residing outside Ukraine, a foreigner, a stateless person or a foreign legal entity;
the object of legal_depreciation is located on the territory of a foreign state;
the legal fact that creates, changes or terminates the legal relationship took place or takes place in the territory of the alienation.

The inheritance procedure will be carried out taking into account the provisions of Articles 70 and 71 of the Law of Ukraine “On Private International Law”. And taking into account the agreement on legal assistance and legal relations, if Ukraine and the state from which the foreign element originates have signed such an agreement.

Cost

The cost is calculated in accordance with the Instruction on the procedure for calculating and collecting state duty, approved by the Order of the Ministry of Finance of Ukraine No. 811 dated 07 July 2012.

List of documents required for the application:

Death certificate of the testator;
Documents that can establish kinship: birth certificate, marriage certificate, extracts from state registers of civil status acts of citizens;
Legal documents for real estate: purchase-sale agreement, lease agreement, donation agreement, lifetime maintenance agreement, certificate of inheritance by law or will, certificate of ownership;

Documents that can confirm the fact of ownership of movable property: receipts for payment, sales contract, warranty documentation, certificate of ownership, securities, etc.

Court order

Where to apply

If it is impossible to resolve the issue of inheritance in accordance with the procedure established by law, the only way to resolve the issue is to apply to the court with a statement of claim for recognition of ownership of inherited property.

Cost

For filing a lawsuit, a person pays a court fee in the amount stipulated by the Law of Ukraine “On Court Fee”.

Automatic calculation of the court fee on the Judiciary website

List and samples of required documents

The list of documents required to confirm the recognition of ownership of inherited property in court:

Death certificate of the testator.
Documents that can establish family relationships: birth certificate, marriage certificate, extracts from state registers of acts of civil status of citizens.
Legal documents for real estate (for example, purchase and sale agreement, mine agreement, donation agreement, lifetime maintenance agreement, certificate of inheritance by law or will, certificate of ownership). Importantly! If the testator has lost the title document for the real estate, this document can be replaced with another available document (for example, technical documentation, decisions of sessions on privatization, or decisions of sessions on providing for use, house books, copies of lease agreements, etc.).
Certificate from KP “BTI” on the right of ownership (if the real estate transaction was made before January 1, 2013).
An informational extract from the state register of property rights to immovable property and from the register of property rights to immovable property (if the deed was committed starting from January 1, 2013).
Certificate on the composition of the family or those registered in the residential premises (where the testator lived).
Extract of registration in the inheritance register.
Resolution on refusal to perform a notarial act, which is issued by a notary in accordance with Article 49 of the Law of Ukraine “On Notaries“.
A document that determines the market value of the inherited property to be taken into account in the price of the claim. Most often, this document is a property valuation report (property valuation act). It is issued on the basis of the provisions of the Law of Ukraine “On the Valuation of Property, Property Rights and Professional Valuation Activities in Ukraine” and taking into account the National Standard No. 2 “Valuation of Real Estate”, approved by Resolution of the Cabinet of Ministers of Ukraine No. 1442 dated 28 October 2004, and National Standard No. 1 “General Provisions for Valuation of Property and Property Rights”, approved by Resolution of the Cabinet of Ministers of Ukraine No. 1440 dated 10 September 2003;</li
Petition for reclamation of the inheritance case.

Jurisdiction over cases involving a foreign element

The courts may accept and consider any case with a foreign element if the parties have provided by their agreement for the jurisdiction of the case with a foreign element to the courts of Ukraine, except as provided for in Article 77 of the Law of Ukraine “On Private International Law”

The jurisdiction of the courts of Ukraine is exclusive in the following cases with a foreign element:

if the immovable property, in respect of which the dispute arose, is located on the territory of Ukraine, except for cases related to the conclusion, modification, termination and execution of contracts within the framework of public-private partnership concluded by the Cabinet of Ministers of Ukraine, according to which the immovable property is the object of such partnership , and the dispute does not concern the emergence, termination and registration of property rights to such an object;
if in a case concerning the legal relationship between children and parents, both parties have a place of residence in Ukraine;
if in the inheritance case the testator is a citizen of Ukraine and had a place of residence in it;
if the dispute is related to the registration of an intellectual property right that requires registration or issuance of a certificate (patent) in Ukraine;
if the dispute is related to the registration or liquidation on the territory of Ukraine of foreign legal entities, natural persons – entrepreneurs;
if the dispute concerns the validity of entries in the state register, cadastre of Ukraine;
if in bankruptcy cases the debtor was created in accordance with the legislation of Ukraine;
if the matter concerns the issue or destruction of securities registered in Ukraine;
cases related to adoption, which was carried out or is being carried out on the territory of Ukraine;
in other cases determined by the laws of Ukraine.

When deciding on the jurisdiction of cases with a foreign element, the court is guided not only by the rules of domestic procedural law, but also by the conflict of laws rules contained primarily in bilateral international treaties on legal assistance and other international treaties.

Taxation

Taxation – in accordance with the Procedure for taxation of personal income established by Section IV of the Tax Code of Ukraine, according to clause 162.1 of Article 162 of which the payer of personal income tax is, in particular, a non-resident individual who receives income from the source of its origin in Ukraine.

The procedure for taxation of income received by non-residents is regulated by para. 170.10.1 of Art. 170 of the TCU, which establishes that income with a source of origin in Ukraine accrued (paid, provided) in favour of non-residents is taxed according to the rules and rates determined for residents (taking into account the specifics determined by certain provisions of Section IV of the TCU for non-residents).

The taxation of income received by a taxpayer as a result of inheritance of funds, property, property or non-property rights is regulated by Article. 174 of the TCU, para. 174.2., para. 174.2.3 which establishes that for any inheritance object inherited by a non-resident heir from a resident testator, the rate of 18 per cent is applied, as defined in para. 167.1 of Article 167 of the TCU.

In accordance with para. 174.3 of Article 174 of the TCU, the persons responsible for the payment (transfer) of the tax to the budget are the heirs who received the inheritance. At the same time, non-resident heirs are obliged to pay personal income tax prior to the notarisation of the inheritance objects.

If the non-resident heir has a document confirming the payment of tax on the value of the inheritance object, the notary in accordance with para. 174.4 of Art. 174 of the TCU shall issue a certificate of inheritance to such heir.

In view of the above, the tax rate of 18 per cent is applied to the value of any inheritance object received by a non-resident in Ukraine from a resident testator, as provided for by para. 167.1 of the TCU. In this case, the non-resident heir is obliged to pay the tax before the notarisation of the inheritance object.

Differences in the interpretation of foreign laws and Ukrainian law

Differences may arise due to different approaches to the recognition of ownership of inherited property.

Ukrainian law allows heirs to participate in court proceedings to recognise their right to inherited property. However, very unexpected and amusing situations can often arise in court proceedings. Here are some real-life examples:

At a court hearing in one of the cities, a misunderstanding arose because one of the heirs showed a very old bookcase in which, as he claimed, there was a very valuable collection of books. However, during the inspection, it turned out that the cupboard was empty and there was no book in it. The court decided that the statement about the presence of valuables in the bookcase was unfounded and rejected the claim of the heir.
In the trial, it turned out that one of the heirs kept very valuable documents in the washing machine, believing that it was a safe enough place for storage. However, during the washing, the documents were destroyed, which caused a serious conflict between the heirs.
During the trial, one of the heirs brought his medical card to the meeting and began to talk about his illnesses and health condition, which, in his opinion, should be taken into account during the distribution of the inheritance. The court refused to satisfy his demands, noting that the state of health is not the basis for the distribution of the inheritance.
One of the heirs brought his horoscope with him to his lawyer and asked if it could affect the distribution of the inheritance. His lawyer replied that the horoscope is not evidence in the court process and does not affect the distribution of the inheritance in any way.
For an effective resolution of your case, we recommend that you provide all the necessary documentation and describe in detail all the circumstances of your case. Our lawyers will thoroughly investigate your case and provide you with clear and comprehensive advice on how to proceed.

These examples show that probate litigation can be unpredictable and very entertaining. But, if you have problems with the recognition of ownership of inherited property with a foreign element in Ukraine, Despacho Internacional “Intereses legítimos” is always ready to help. We offer remote legal services to help you resolve your probate issues with a foreign element, providing you with a sense of security and confidence in dealing with this complex issue.

In order to effectively resolve your case, we recommend that you provide all the necessary documentation and describe in detail all the circumstances of your case. Our lawyers will thoroughly investigate your case and provide you with clear and comprehensive advice on further resolution of the problem.