Inheritance and Estate Planning in Kenya: What Every Investor Should Know

The question of inheritance is often overlooked by foreign investors in Kenya. Yet organising the transfer of your assets is essential to avoid legal complications for your heirs. Good news: the Kenyan inheritance system is well-structured, predictable and compatible with Swiss law.

1. Inheritance in Kenya: What Changes for a Foreigner

Kenyan succession law applies to assets located in Kenya, regardless of the owner's country of residence or nationality. This means your land or villa in Kenya will be subject to Kenyan law for all matters concerning transfer, inheritance and registration of rights.

Kenya applies the Law of Succession Act (Chapter 160 of the Laws of Kenya), a modern legal framework based on English common law. This law governs:

• The validity and execution of wills
• Intestate succession (without a will)
• The appointment and powers of executors
• The administration of estates
• The protection of dependants

The fundamental principle is that succession is governed by the law of the place where the property is located (lex rei sitae). For land in Kenya, Kenyan law therefore applies, though international treaties may modify certain rules.

2. The Will in Kenya

A will is the simplest and safest tool to organise your succession in Kenya:

Will drafted in Kenya

• Must be in writing, signed by the testator in the presence of two witnesses
• Witnesses must not be beneficiaries of the will
• Can be drafted in English (recommended to avoid translation issues)
• Registered with the High Court of Kenya to facilitate execution
• Cost: approximately KES 30,000 - 50,000 (CHF 200 - 350) with legal assistance

Will drafted in Switzerland

• A valid will under Swiss law may be recognised in Kenya
• It is strongly recommended to add a specific codicil for assets in Kenya
• A certified English translation will be required
• Execution will be more complex and slower than with a Kenyan will

3. Intestate Succession (Without a Will)

If you die without a will (intestate), Kenyan law provides an automatic distribution of your assets:

Important: without a will, your heirs will need to initiate estate administration proceedings before the High Court, which can take 6 to 18 months and cost several thousand francs. A will helps avoid these delays and costs.

4. Inheritance Tax and Estate Taxation

A very favourable aspect for investors: Kenya does not levy any inheritance tax. Specifically:

• Estate Duty (inheritance tax) was abolished in Kenya in 1982
• No tax is due in Kenya on the transfer of real estate by inheritance
• The only costs are court and legal fees for estate administration (KES 50,000 - 150,000 depending on complexity)
• Unrealised capital gains are not taxed at the time of inheritance

Swiss side taxation

On the Swiss side, inheritance tax varies by canton. As a general rule:

• Direct line heirs (spouse, children) are exempt or taxed at very low rates in most cantons
• Assets located abroad are generally taxable in the country where they are situated
• The tax treaty between Switzerland and Kenya does not specifically cover inheritance, but the principle of territoriality applies

5. Transferring to Children

If you wish for your children to inherit your Kenyan property, several options are available:

Direct transfer by will

The simplest solution: name your children as heirs in your Kenyan will. Upon your death, they become property owners (subject to the surviving spouse's rights).

Lifetime gift

You can also transfer the property to your children during your lifetime:

• Simple gift: property transfer by Kenyan notarial deed
• Transfer fees: approximately 4-6% of the property value
• No gift tax in Kenya (another tax advantage)
• Possible to retain a life interest (right of use and habitation)

Family trust

A trust is a legal tool widely used in common law countries:

• You place the property in a trust with your children as beneficiaries
• You can act as trustee during your lifetime
• A trust avoids probate proceedings upon your death
• More complex and costly to set up (KES 100,000 - 200,000)

6. Transfer via a Kenyan Company

If you purchased your land through a Kenyan company (to benefit from freehold), the transfer is done through the company's shares:

• Share transfer: you transfer the company shares to your heirs, giving them indirect ownership of the property
• Advantage: no change at the land registry, no property transfer fees
• Drawback: the company continues to exist and must meet its legal obligations (annual fees, filings)
• Flexibility: shares can be transferred gradually to children as they grow up

This solution is particularly suitable for large estates or when multiple investors are involved.

7. Conflict of Laws and International Treaties

Succession may involve multiple legal systems:

Potential conflict

If you are domiciled in Switzerland but own property in Kenya, two inheritance laws may apply:

• Swiss law for assets in Switzerland and personal aspects of succession
• Kenyan law for the property located in Kenya

Solution: coordination

To avoid conflicts:

• Draft two separate wills (one for each country), ensuring they are consistent
• Clearly state in each will that it only covers assets in the relevant country
• Consult a lawyer specialising in international private law in each country
• Consider a declaration of choice of applicable law (if Swiss law permits)

8. Practical Recommendations

To organise your inheritance in Kenya with peace of mind:

1. Draft a Kenyan will as soon as you become a property owner in Kenya. It is simple, inexpensive and prevents major complications for your heirs
2. Inform your heirs of the existence of this will and the location of your Kenyan assets
3. Keep documents safe: title deed, purchase contract, will, registration certificate, in a secure place accessible to your heirs
4. Appoint an executor residing in Kenya or familiar with the Kenyan system to facilitate estate administration
5. Review your will every 5 years or upon major life changes (marriage, divorce, birth, new property acquisition)
6. Consider a trust or company if your estate is substantial or you want more flexible transfer options
7. Consult a Kenyan lawyer specialising in international inheritance law to ensure your will is valid and enforceable