Many foreign emigrants to Mauritius are only too glad when they discover that there are no inheritance or estate taxes in Mauritius, in addition to no CGT or donations tax. Many emigrants think this gives full flexibility in terms of their succession and estate planning. However, from a succession law perspective, there is a strange rule that people living in Mauritius should be aware of – the forced succession rules.

Mauritius law follows the French civil code of forced heirship. This is a principle that is aimed at protecting the interests of the children and the surviving spouse of the deceased.  These rules apply to anyone regarded as domiciled in Mauritius at the time of their death and generally apply to all assets except property outside Mauritius.

Unlike the succession laws of countries like South Africa and the UK, where a person may freely bequeath their assets as they wish after their death via a will, the rule of forced heirship will always protect the succession rights of surviving children. So, while property in Mauritius can be freely given to any person during the lifetime of the donor by way of a gift or by a will, once the person dies and if survived by children, the forced heirship rules will apply. In fact, any assets donated during the lifetime of the deceased or bequeathed in terms of a will must be pooled back into the estate for the purposes of calculating these protected reserves.

The rules are very complex and interact with other elements of Mauritian and international law, but in a nutshell – at the time of death of a person, any property left by the deceased will be categorised into a reserved portion and unreserved portion. The reserved portion is fixed and cannot be altered or circumvented by testamentary provisions and is calculated by reference to the number of surviving children.  Thus the reserved portion is:

  • One half of the estate, if the deceased leaves one child.
  • Two-thirds of the estate, if the deceased leaves two children.
  • Three-quarters of the estate, if the deceased leaves three or more children.

The reserved portion is divided equally among the surviving children and the descendants of any predeceased children. It should be noted that surviving children are not limited to dependent children but includes all children regardless of age and regardless of their legitimate or illegitimate status!   Very French, some might say….

Once the protected reserve is fixed, the balance would then constitute the unreserved or ‘available portion’ of the estate that may be freely bequeathed.

While a surviving spouse is not a protected heir under the above rules, the Mauritian Civil Code would apply, entitling such spouse a lifetime right of usufruct over the matrimonial home and its furniture. This usufruct right cannot be altered in any way.

Many foreigners lose sight of the fact that the rule of forced heirship applies equally to Mauritian citizens and foreigners. Foreigners who have fixed property in Mauritius or are considered domiciled in Mauritius at the time of death need to take note. If your will does not align with the above rules, it may be best to seek advice on how you can give free will to your Will.

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How you structure your business is a critical question as you expand globally.  The right structure will protect your assets, improve your currency position, support your business operations, facilitate future business expansion and changes, and optimise your overall tax rate. Trying to unscramble a sub-optimal structure entered into in haste or without full consideration of relevant facts is complex and expensive, so it’s important to plan upfront.

Structuring an international business is both a science and an art – this is our specialist area of expertise. Regan van Rooy is an international tax and structuring advisory firm focussing on Africa. We have offices in South Africa, Mauritius and Ireland and we can help you with any international tax or structuring query.