Jamaica: Inheritance

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Inheritance tax and law

The Global Property Guide looks at inheritance from two angles: taxation, and what inheritance laws apply to foreigners leaving property in Jamaica: what restrictions there are and whether making a will is advisable.

INHERITANCE TAX

How high are inheritance taxes in Jamaica?

Inheritanceis not taxed in Jamaica. But transfers of properties are subject to tax.

Properties can be transferred in two ways, inter vivos (in life) transfers or mortis causa (after death) transfers.

For transfers after death, the taxable inheritance is the market value of the estate less funeral expenses, estate administration expenses, and debts related to the property up to a maximum of 5% the property value. The tax rates for transfer upon death are as follows:

For inter vivos (in life) transfers or gifts, the tax rate is a flat 7.5%. When the transfer is between related people, the tax is imposed on the property’s market value.

The process of releasing inheritance is regulated by the Government of Jamaica. Until all the paperwork has been done and government duties paid, no property or other assets are released. The entire process takes about 18 months or longer.

INHERITANCE LAW

Thanks to Myers, Fletcher & Gordon

What inheritance laws apply in Jamaica?

Jamaican laws apply to the inheritance of real estate in Jamaica.

The principal laws applying to inheritance issues in Jamaica are:

• The Probate of Deeds Act, which outlines the requirements for proving wills.
• The Wills Act, which states the rules regarding making wills, determining the validity of wills, and the variation and revocation of wills.
• The Inheritance (Provision for Family and Dependants) Act, which allows certain members of the deceased’s family to make an application to the Court for financial provision out of the property left by the deceased.
• The Intestates Estates and Property Charges Act, which sets out how the property of an intestate is to be distributed.
• The Administrator-General’s Act.
• The Trustees, Attorneys and Executors (Accounts & General) Act.
• The Trustees Act.
• The Settled Land Act.
• The Probates (Resealing) Act.
• The Real Property Representative Act.
• Civil Procedure Rules, 2002.
• The Property (Rights of Spouses) Act.

Jamaican inheritance laws always apply to the inheritance of real estate in Jamaica; however if the deceased’s real estate is outside of Jamaica, then the laws of the country where the real estate is situated apply.

Jamaican inheritance laws always apply to the personal property of a deceased person who had permanent residence in Jamaica. If the deceased had a permanent home elsewhere, the law of the deceased’s permanent home applies to personal property.

If one spouse belongs to one nationality and the other spouse belongs to another, this does not affect how inheritance issues are resolved.

If the foreigner’s national law provides that in inheritance issues, the relevant law is the law of the country where the property is situated (e.g. in the case of a deceased foreigner who owns real property in Jamaica) then the Jamaican Court decides the matter by applying Jamaican law.

In Jamaica, inheritance issues are dealt with by either the Supreme Court or the Resident Magistrates Court. The Resident Magistrate’s Court handles inheritance matters where the value of the deceased’s estate does not exceed 1.5 million dollars and the Supreme Court handles other matters. The matters brought before either Court are decided by a single judge. These are the courts that would make decisions about non-resident foreigners’ property.

There is a reserved portion only for the surviving spouse.

The Property (Rights of Spouses) Act gives each spouse in a marital relationship (including a common law union) an entitlement to a half share in the family home; however the entitlements of a spouse may be varied by the Court.  In order to qualify as a family home under the Act, the house must be:

• wholly owned by one or both spouses ;
• used as the only or principal family residence.

The rights arise in the following circumstances:

• on the termination of marriage or cohabitation due to death
• if there is a divorce, or if the marriage is declared null and void, or if the married couple separates and there is no likelihood of reconciliation;
• on the termination of cohabitation of an unmarried couple;

Section 10 of the Act also permits spouses (married and unmarried) to enter into property agreements which address issues such as the current and future ownership and division of property.

Apart from this, no reserved portion of the estate must go to certain persons; however the Inheritance (Provision for Family and Dependants) Act allows certain members of the deceased’s family to apply for financial provision. This law applies to all property in Jamaica, even if the property is owned by a foreigner. The deceased’s family can apply to the Court for reasonable financial provision for maintenance on the basis of what is left to the applicant by the will of the testator, or by the rules governing intestacy.

It is normal to make a will in Jamaica.

The formalities for making a will in Jamaica are as follows:

• The Will must be in writing.
• The testator must sign at the foot or end of the Will in the presence of two witnesses who must be both present at the time he is affixing his signature to the Will and who themselves must also sign the Will below the signature of the testator.

The question of whether it is advisable for a foreigner to make a will in Jamaica depends upon the jurisdiction from which the foreigner comes. If the jurisdiction has the same formalities for making a will in Jamaica, then a local will need not be made in Jamaica.

A will can be made in the jurisdiction of the foreigner, and the executors can obtain a Grant of Representation in that country. That Grant (if the foreigner’s jurisdiction is a commonwealth jurisdiction) can be resealed in Jamaican courts. If the jurisdiction is not commonwealth, a fresh Grant of Representation needs to be obtained in Jamaican courts. In obtaining this new Grant in the local courts, the applicant is required to submit certified copies of the Grant of Representation obtained in the deceased’s jurisdiction as well as a certified copy of the will. After obtaining the resealed or fresh Grant, the applicant can then proceed to administer the property situated in Jamaica.

Jamaican law includes rules of testate succession

When a Jamaican citizen dies intestate, whilst domiciled in Jamaica, his/her estate is distributed in the following order:

The Surviving Spouse takes:

• the furniture and effects of the deceased;
• $10,000 or ten percent of the net value of the estate (excluding furniture and effects), whichever is greater;
• interest of ten percent on the sum payable above until the sum is paid in full or appropriated;
• A proportion of what remains of the deceased’s estate after making provision for the above, based on the following:
• If there is no child or parent surviving the intestate, the spouse is entitled to the entire estate;
• If there is only one child – the spouse takes 2/3 and the child gets 1/3;
• If there is more than one child then the spouse takes ½ and the other ½ goes to the children;
• If there are no children but a surviving parent or parents, the spouse takes 2/3 and the parents take 1/3.

Children - If there is no spouse, the children receive the entire estate.

Parents - If the intestate is survived by parents but not by a spouse or children the parents takes the entire estate.

Other Relatives - If there is no surviving spouse, parent or child the other relatives of the deceased are entitled to the estate in the following order: firstly, brothers and sisters, secondly, grandparents, and thirdly, uncles and aunts.

The State/Crown - If there are no surviving relatives in any of these categories, the state takes the property on the basis that it is property to which no one is entitled.

When a foreigner dies intestate leaving property in Jamaica, then:

• If the property is real estate, it is distributed in the manner described above.
• If the property is personal, it is distributed in the manner set out above, but only if at the date of his/her death the foreigner was permanently resident in Jamaica.
• If the deceased had a permanent home elsewhere, the intestate law of the deceased’s permanent home applies to personal property, but not to real property.

The owner of property in Jamaica is free to give it to whomever he/she pleases.

This freedom, however is restricted to some extent by the following legislation:

• The Property (Rights of Spouses) Act

Under this Act, where the family home is registered in one spouse’s name alone, then any transaction concerning the family home requires the consent of both parties. It also provides that where a transaction is entered into without the consent of the other spouse (who is not on the title) the court can set it aside on an application by the other spouse.

• The Inheritance (Provisions for Family and Dependants) Act

This Act allowed certain members of the deceased’s family to apply to the court for financial provision out of the property left by the deceased.

Under this Act, in the case of dispositions of property (not made for valuable consideration) made by the deceased, less than one year before his/her death, with the sole intention of defeating an application under the Act, the Court can order the donee to make provision for the family or dependants out of the gift the donee has received.

Ownership of property is based on the Torrens Title.

Most of the land in Jamaica is registered under the Registration of Titles Act. It looks primarily at what is registered on the title to determine ownership. The Act provides that titles issued under the Act are to be conclusive evidence of the particulars stated therein, and are regarded in Court as a complete defence to any legal proceedings for the recovery of land against the person registered as proprietor of the land; however, persons having equitable interests in land may lodge caveats against the title and can seek to enforce their rights in Court.

Jamaican law governs marital property rights.

Spouses who own real property in Jamaica but reside in a different country cannot apply the laws of their home country to determine the ownership rights of each spouse to real estate situated in Jamaica.

To determine the pre-death ownership of real estate between spouses, regard must be taken of the provisions of The Property (Rights of Spouses) Act, as described above. This Act also provides for cases where spouses have a dispute over the title to (or possession of) property; it allows either spouse (or any bank, corporation or public body in which the spouses have investments) to apply to the Supreme Court or Resident Magistrate for settlement of the issue.

The Act also allows spouses who end their relationship to apply to the Court for the division of their property. Application to the Court can also be made if one spouse diminishes the value of the property through gross mismanagement. In dividing the property, the Court takes into consideration a number of factors, such as the contribution, financial or otherwise, directly or indirectly made by or on behalf of each spouse, and the duration of marriage or period of cohabitation.

Children are not prohibited from owning or inheriting property.

Where a will leaves property to a child, the executors of the will usually hold that property on trust for the child and transfer it to the child when he attains the age of majority (eighteen years in Jamaica).

It is possible for a testator in his will to direct his executor to transfer the property to an adult person to hold that property on trust for the child. The testator is not required to select a relative of the child to hold the property.

Where property is transferred to a child prior to his attaining the age of majority, the property becomes settled land and the child becomes a tenant for life. The powers of a tenant for life may be exercised on his behalf by the trustee of the settlement. If the settlement does not provide for a trustee, the Court will appoint one on the application of a guardian or next friend of the child. The Trustee is empowered to exercise all the powers of a tenant for life including the option of selling the property and then holding the proceeds for the child’s benefit.

Jamaica - more data and information

• How high is income tax on residents in Jamaica?

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posted by Carlene Grant | 2008-02-13

Teacher, St. Mary

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