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.
How can we help?
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.