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Spanish Inheritance Tax: How much is it?

Antonio Flores
1st of February 2000

Where spanish property, and generally, the estate of a person is transferred by inheritance, the Tax authorities charge as spanish inheritance tax (IHT) a percentage on the tax base according to a sliding scale where different considerations are taken into account. The same scale is applicable to donations, which is important insofar as this tax could be applied to a purchase/sale contract where the Tax Authority deems that the parties have underdeclared the price of the property on a Public deed of conveyance or, in some cases, private purchase contract.

Donees and inheritors are divided into four categories, depending on the relationship with the deceased, and allowances are conceded depending on the group.

• Group 1: Descendants and adopted children under 21: 15,956.87 €, rising to 47,858.59 €, depending on age.
  
  
• Group 2: Descendants and adopted children over 21, spouses, parents and adoptant parents: 15,956.87 €,
  
  
• Group 3: Relatives in second and third degree, that is, brothers/sisters and nephews/uncles, respectively. 7,993.46 €.
  
  
• Group 4: Relatives in forth degree, or withourt any relationship, for example, a friend. Nought.
  

Once the appropriate allowance has been deducted, the following tax rate is applied to the remainder:





When the tax has been calculated , a multiplicand is applied to the figure, taking into account pre-existing wealth as well as relationship with the deceased. It has to be noted that Spain does not recognise the concept of partners or common law spouse when aplying inheritance tax.





An inheritor who qualifies for the bottom of both scales and falls in group 4 will find the Tax Authority demands from him prior to registering the property under his name a monstrous percentage of 81.6 of the estate left.

Fortunately, very few people qualify in such groups, and if they do, there are legitimate ways to get round the bite. A versed lawyer on inheritance matters will assist you in order to mitigate the exposure to this tax.

Is a Spanish will necessary if I am a foreigner?

A spanish will is not absolutely necessary althouth it is highly recommendable. The truth of the matter is that many people avoid drawing up such documents since death is not an issue at a certain period of life. However, any asset proprietor in Spain should arrange his post-death affairs in a neat way, inasmuch as the heirs would otherwise be involved in consuming and expensive legal procedures which would attract different legal jurisdictions. An experience not recommended by those who have experienced it.

Furthermore, so far nobody has died from drawing up a simple will.

If I have a foreigh will?

A foreign will may cover your Spanish assets but again the procedure involves obtaining the probate of will in the jurisdiction of the will, legalisation, translation and a lot of legal assistance througout the procedure that most certainly will amount to a prohibitive legal fees bill.

Where are spanish wills registered?

A most widely used type of will is signed before a Notary Public, who keeps the original. A copy is then sent to a central registry of wills which is located in Madrid. This registry issues a certificate upon death of the testator with the contents of the will and is necessary in order to procure the transfer of the assets on to the inheritors.

Discuss this Article

• sandy Says:

  Fri, Feb 19th 2010, 20:21

  I have read several conflicting pieces of advice with regard to the treatment of stepchildren in Spanish Succession laws. Some advisers say they are treated the same as no relation (Group 4) and some say they are in Group 3. How can I find out the correct position. It makes a big difference to me. The property in question is in Andalucia.

• Malcroach Says:

  Sun, Feb 21st 2010, 11:23

  You are correct Stepchildren are classed as Group 4 unless they have been legaly adopted

• jill payne Says:

  Sun, Feb 28th 2010, 13:49

  please could you advise as to which group my cousin would be classed in She is my mothers brothers only child Ihave recieved differant answers and need the correct one please

• Lawbird Lawyer Says:

  Tue, Mar 2nd 2010, 10:14

  Dear Jill, You are probably receiving conflicting replies because you may not be asking the right question. Who is the one bequeathing their Spanish estate? You, your mother, or your mother's only brother? Depending on your reply then we can determine the degrees of kinship which will in turn translate into your cousin being included in one group or another for tax allowance purposes. Yours faithfully, Raymundo Larraín Nesbitt

• dorozi Says:

  Fri, Apr 9th 2010, 23:08

  We have spanish wills but what happenes regarding inheritance tax if one of the partners die, we have 4 adult children that live in the UK.

• Lawbird Lawyer Says:

  Mon, Apr 12th 2010, 12:45

  Dear Dorozi, If one of you dies, the surviving spouse is not exempt form paying IHT in Spain. If the survivor is fiscal resident they can qualkify for a tax allowance of 95% on thier taxable base. In addition some regions in Spain raise this tax allowance to almost 99,99% meaning there is no tax to be paid. Regarding the children it pretty much depends who are the appointed beneficiaries in your last will. What is the content of your will? Who are the appointed beneficiaries? Do they inherit in equal shares? Spanish IHT is a fairly complex and technical matter as multiple parametres need to be taken aboaed to do the calculations. Yours faithfully, Raymundo Larraín Nesbitt

• mrblue Says:

  Mon, Apr 19th 2010, 01:24

  Hi, My parents purchased an apartment in Costa del Sol spain about 16 years ago, we live in the uk. They are both on the deeds and do not have a spanish will. My dad died 7 years ago and the apartment was not mentioned in the will. Obviously his estate went to my mum. The apartment was bought for £35,000 and at my dads time of death would have been worth about £95,000. Would my mum have to pay approx £10,000 in capital gains tax? Also we have only been made aware that there is a wealth tax, how much is this per year? This may have been paid for the first two years only. Also, what documents would we need to bring to a spanish lawyer?. My mum would like to leave the apartment in her will to myself and my sister, what would be the easiest way of doing this, or can we purchase it of her? I know this is a lot to ask all at once, any information would be a great help. Kind regards, Beverley

• Lawbird Lawyer Says:

  Mon, Apr 19th 2010, 13:07

  Dear Sir, You're right, lots of questions. First of all your father passed away in 2003, therefor neither Spain's IHT ("Impuesto de Donaciones y Sucesiones", or ISD for short) nor Plusvalía Tax is no longer payable; although your lawyer will have to both file and lodge it at the Land Registrar regardless. Wealth tax is a tax that although is still active has been surpressed as from the 1st of January 2008: Spanish Inheritance Tax Abolished? I’m Afraid Not 19th September 2008 What you are really asking me is how much is the imputed income tax on the Spanish property. As a rule-of-thumb its 24% of the 2% of the cadastral value. The cadastral value is a value taken for real estate assets employed to calculate different taxes whether national, regional and local. You'll find the cadastral value for your mother's property in any IBI receipt. More on this: Up to 300% Increase in Property Taxes in Malaga in 2009 -12th September 2008 Your mother can either bequeath you her Spanish estate or else you can buy it outright from her, yes. I would need all more information on the matter to give you an informed advice. Buying it outright would be approx 10% of the value of the property without a mortgage and 12% with a mortgage. The Transfer Tax payable is 7% for the buyer and the vendor pays both 19% CGT and Plusvalía tax. We can asssit you both in the conveyance of your mother's property as well as drafting her Spanish last Will. Please contact us if you want more details. Yours faithfully, Raymundo Larraín Nesbitt

• mrblue Says:

  Mon, Apr 19th 2010, 14:54

  Dear Sir, Thank you for your speedy reply, it is greatly appreciated. Mum thinks she has to buy dads half of the property as both names are on the deeds, is this true? Could you give her a rough idea of costs incurred to take dads name off the deeds and to make a spanish will, leaving the property to myself and my sister and all taxes involved in this? She is very worried about the costs involved. Mum is travelling to Spain in May and was hoping to arrange a consultation. Can I email you with details if possible? Thank you Beverley

• Lawbird Lawyer Says:

  Mon, Apr 19th 2010, 15:03

  You're welcome. Sure you can e-mail me the details and set an appointment with me: contact form Your mother would be right if your father was still alive. If he were alive the most efficient solution possible from a tax mitigation point of view would be to follow what is known as a "Dissolution of Joint Property Ownership" (DJPO, for short) which only attracts 1% Stamp Duty on the full property value waiving de facto 6% Transfer Tax. More details on this DJPO procedure in my article: Dissolution of Joint Property Ownership in Spain - 14th November 2007 However, as your late father passed away seven years ago, following what you write, a DJPO cannot be followed. An estate of transfer to heirs must be followed. More details in my article: Spanish Inheritance Tax: Advantages of Making a Will in Spain - 3rd September 2009 The legal service is explained in detail here: Estate Transfer to Heirs Yours faithfully, Raymundo Larraín Nesbitt

• Mike Says:

  Mon, Apr 26th 2010, 20:03

  My father has passed away. he owns a apt. in spain. I am 45 and my brother is 49. The property is paid for. We live in the USA. what should I do now?

• Lawbird Lawyer Says:

  Tue, Apr 27th 2010, 11:33

  Dear Sir, You need to retain a lawyer and porceed with the transfer of the Spanish estate to the appointed beneficiaries, presumably yourself and your brother. To have the property transferred over to your name a legal procedure must be followed. Firstly a Grant of Probate must be obtained. Following that a Deed of Acceptance and Declaration of Heirs has to be done before a Spanish Notary public. Following that death taxes have to be calculated, paid and filed. Only then will the property be lodged under both of your names. We offer you our legal services should you be interested (please click on the blue link): Estate Transfer to Heirs This service is intended for those who are inheriting the Spanish assets of a deceased person, whether as the legal heir to an estate or by means of a Will. The Estate transfer to heirs service includes: • Requesting copies of the Death Certificate, in the event that the death took place in Spain. • Requesting of a Will Certificate information and location from the Central Registry of Wills in Madrid. • Obtaining of the Will from the Notary Public where it was signed / Estate Heirs Statement (in those cases where there is no will) • Drafting and signing of the Deed of Inheritance Acceptance • Partition of the inheritance according to what the will states, or, where there is now will, to the desires of the inheritors . • Inscription at the Land Registry of the new owners of the Estate inherited. • Cadastral modification of new owner • Arrangement, calculating and payment of the applicable Spanish Inheritance Tax. • Arrangement, calculating and payment of the applicable Plusvalia Tax. If you're interested in this legal service, please contact us. Yours faithfully, Raymundo Larraín Nesbitt

• Peter Rayner. Says:

  Fri, May 21st 2010, 16:42

  Catalunya changed the law on adopted children last year and now they are treated the same as any direct descendant..

• L. Sanderson Says:

  Sun, May 23rd 2010, 21:16

  My partner and I are not married, but we have joint ownership of our property. We are both tax residents in Spain. Would it benefit us to get married with regards to inheritance tax?

• Lawbird Lawyer Says:

  Mon, May 24th 2010, 09:28

  Dear Madam, It would greatly benefit both of you fiscally, yes. There's a national tax allowance on IHT form one surviving spouse to another of 95% of the taxable base if you are tax resident in Spain. Yours faithfully, Raymundo Larraín Nesbitt

• Ellena Says:

  Fri, May 28th 2010, 16:36

  My husband died unexpectedly after living in Spain together for 25 years, and having permanencia. Having reached pension age and retired, our only assets are our home valued approx 300.000 euros and in joint names, other than that we lived on our pension. What sort of money is it going to cost me to have the house transferred to my name so that I can sell and downsize?

• Ellena Says:

  Fri, May 28th 2010, 19:37

  Sorry..me again..if I cannot afford the inheritance tax to claim my husbands share of our joint owned property....is there any reason that I couldn't sell my half in order to raise the funds to pay the inheritance tax....I'm feeling quite desperate, and never imagined that at 70, I would be left in this situation....we did everything legal, and both thought that each other would be fairly safe.

• Diane MCkAY Says:

  Fri, May 28th 2010, 20:32

  Mr step daughter mother died three days ago just as she was to sign the sale of her apartment and return to the UK. She made an english will leaving everythink to her daughter. Am I reight to assume she as to have a lawyer in Spain and one in England. Will the English will be accepted.Can the sale go ahead and what needs doing. The Spanish laywer dealing with the sale as the deeds as she died the night befiore she was due to sign and in fact they investigated why she did not turn up .and called the police to break in. My step daughter is quiet fragile and is fearful she will will be ripped off.

• Lawbird Lawyer Says:

  Mon, May 31st 2010, 09:22

  Dear Ellena, If you've been living in Spain for the last 25 years I take for granted you are resident here. State law rules that surviving spouses are entitled to a 95 p.c. tax exemption from the value of their property on inheriting in Spain from their spouses. You have to be resident in Spain and have lived in that property for at least the the 3 previous years and be able to prove it. Regional laws have even more lenient tax allowances and exemptions wich may bring down the IHT tax bill to zero. Depending on where your property is located in Spain (in which of the 17 regions or autonomous communities) these regional laws are applied. Moreover, if you do have to pay IHT you can request to differ it or even pay it in installments over a five year period. If you had a whole life insurance this will normally pay off the average IHT tax bill comfortably. Please read carefully my article which may help to clarify issues for you: Spanish Inheritance Tax: Advantages of Making a Will in Spain - 3rd September 2009 You can try to sell your half of the property but I doubt you will find a buyer. I think you ought to hire a priofessional such as a lawyer or a tax expert to give you an estimate of your IHT liability. From what you derpict on your post you may be pleasantly surprised on finding your IHT bill considerably lower than what you were led to believe. There are plenty of unscrupulous companies preying on British and Irish misselling them financial and legal services to waive Spain's IHT when the reality is that many beneficiaries are in no real need of them. This may be your case. Take advice and request an estimation of yout tax liability. Yours faithfully, Raymundo Larraín Nesbitt

• Lawbird Lawyer Says:

  Mon, May 31st 2010, 09:31

  Dear Ms McKay, An English will is prefectly acceptable and legal to bequeath a Spanish estate. However it is impractical for a number of reasons which are explained in detail in my article: Spanish Inheritance Tax: Advantages of Making a Will in Spain - 3rd September 2009 The sale cannot go through until IHT is paid and the property is registered under your stepdaughter's name at the Land Register. The problem with English wills on bequeathing Spanish estates is that they take on for ever. The Grant of Probate normally exceeds one year so the beneficiary will attract all the penalties for late payment of the IHT. Which is why Spanish lawyers always recommend foreign clients to have to wills in place, one in your home country ruling on your assets there and a second one specific for your Spanish assets. Yours faithfully, Raymundo Larraín Nesbitt

• Tony Says:

  Mon, May 31st 2010, 20:42

  My mam died two years ago in Spain, she bought property with my stepdad. before she could sign her will she died. With Spainish law who does the property go to.

• Lawbird Lawyer Says:

  Tue, Jun 1st 2010, 09:06

  Dear Sir, What nationality did your mother hold? Was she married to your stepfather? Did she draw up a will in her home country? Did she have more children? What value was the Spanish estate? Did she own real estate assets (i.e. dwellings, plots of land) in her home country? In which of Spain's 17 regions was the proeprty located? Yours faithfully,

• Tony Says:

  Tue, Jun 1st 2010, 14:40

  Her nationality is English she is married to my stepfather and there was no will made at home, the day she was to sign her will in Spain she died, my mother have one daughter to my stepfather. She had no other property in England, the only property they had was in Alicante.

• Lawbird Lawyer Says:

  Thu, Jun 3rd 2010, 10:17

  Dear Sir, In that case Spanish law would apply and you would inherit in equal shares with your stepsister. Yours faithfully,

• Nichola Says:

  Thu, Jul 1st 2010, 22:10

  Dear Sir, My father passed away in Feb 2006 and at the time of his death, his 50% of the property passed to my mother. At the time of his death, my mother was asked to pay 1700 euros (although she cannot remember now what this was for) and now she is selling the property, she is being asked to pay IHT in excess of an additional 10,000 euros. My mother has been advised that the law has recently changed whereby the surviving spouse receives a 95% allowance on IHT but unfortunately my father died before this date and as such she must still pay at the previous rate. This seems very unfair, does this sound right?

• Lawbird Lawyer Says:

  Fri, Jul 2nd 2010, 09:40

  Dear Nichola, To the best of my knowledge that tax exemption available to resident surviving spouses of 95% on the estate has been going on for quite a while now, as in for the last quarter of the century as per art 20.2 of the LISD from1987. It is not a "recent" change by any extent of the word. Your father was well alive when this tax exemption was already in force and I was in school. Yours sincerely, Raymundo Larraín Nesbitt

• Christopher S. Says:

  Mon, Jul 5th 2010, 11:02

  Dear Sirs, my grandfather (mother's father) died a few years ago, leaving property in Majorca and his assets to his 2nd wife in a Spanish will. Now she has died and has left the whole estate to myself and my brother, as well as my uncle. Although we are blood relations to my grandfather and those were his wishes, we apparently are not blood relations to his 2nd wife and there is confusion over what should be happening. She has no living family. The Spanish solicitor has appointed himself as executor which we find surprising, and has told us to wait 24 days until the will can be read. He has locked the property up, holds the keys and refuses any person to go there until the will has been read. He has also advised we will have to pay "high IHT" but has not quoted a figure. Any advise would be useful as we are very concerned with all of the above. Many thanks.

• Lawbird Lawyer Says:

  Mon, Jul 5th 2010, 11:24

  Dear Christopher, The Executor is right. As you are not kinship of your grandfather's second wife you will be ranked for IHT purposes in Group IV meaning you have no national tax allowance. Besides, I take for granted you are not resident in Mallorca either so you are not eligible for lenient regional tax allowances either. The above two points will land you higher in the tax bracket for IHT. Regarding the lawyer withholding the will for the next 24 days I have no idea why he may be doing that. Perhaps he does not have the will as you believe or maybe he's just making sure it is indeed her last will requesting from Madrid's Central Registry of Last Wills information pertaining to it which takes on average 2-3 weeks. I'm sure there's a logical explanation to it. You can read further on IHT in our articles: EU Pulls the Stops and Vows to Put and End to Inheritance Taxation Discrimination on Non-Resident Beneficiaries Inheriting in Spain -20th May 2010 New EU Regulation to be Passed on Succession and Wills -18th May 2010 Spanish Inheritance Tax: Advantages of Making a Will in Spain – 3rd September 2009 Free Testamentary Disposition for UK Citizens: Only if You Own Property in the UK – 22nd October 2008 Spanish Inheritance Tax Abolished? I’m Afraid Not - 19th September 2008 Ways on How to Avoid Inheritance Tax on Spanish Property – 22nd June 2005 Applicable Inheritance Law to Estate Located in Spain – 16th April 2004 Spanish Inheritance Tax: How much is it? – 1st February 2000 Let me know if you are interested in hiring us to represent your legal interests in this matter. Our law firm acts nationwide. Yours sincerely, Raymundo Larraín Nesbitt

• Joe Hill Says:

  Wed, Jul 21st 2010, 11:52

  My mother and father, married to each other, own a property in Alicante Province. They are both German citizens, and do have Spanish NIE numbers, as far as I know. They are both on the deed, the home valued at approx. 120,000 Euros. If one partner dies, what is the tax liability for the other partner, being that they are not Spanish citizens. Best Regards, Joe Hill

• Susanna K Says:

  Thu, Jul 22nd 2010, 12:35

  Dear Sirs. My partner and I bought a house near Denia, Alicante. I would estimate the house to be worth in the region of Euros 600,000 and it is in our joint names. We are not married. I have three children aged 17,19 and 22. My partner has a son aged 15. We are making a spanish Will on 28 July. We would like to leave the house to the other surving partner. Should we both die together then we would divide the house equally between the four surviving children. As we are not married, I assume that I would be considered group 4 and would have not qualify for any inheritance tax allowance. Would this be on just one half of the property as it is in joint names? Also, should we both die, please would you define which groups the children would fall into with regards to inheritance tax? We do plan to get married but thought it would be the responsible thing to make a will now. Do we have to make another will when we marry? Thank you very much. Regards, Susanna K

• aflores Says:

  Thu, Jul 22nd 2010, 16:08

  Dear Susanna, If you are not married you will in the least favourable group. Your children will come under group 2 in any case, unless of course one of the children not related to one of the owners does inherit. With regards to the sum on which the tax will be applied it is the amount being bequeathed, which means that if you inherit from your partner, or viceversa, you will have to pay taxes only on 50% of the value of the property. You may wish to change you will whereby your children will receive the bare ownerhsip of the property while you both retain the life interest. This will reduce the exposure on IHT quite considerably.

• Susanna K Says:

  Fri, Jul 23rd 2010, 12:31

  Dear aflores Thank you very much for your valuable advice. Please permit me one more question: When we are married, would any step-child be considered as if they were your own child? None of the children have been legally adopted. As mentioned before, the house is in Alicante district and we are non-resident at present. Thank you once again. Regards, Susanna.

• steffi Says:

  Mon, Jul 26th 2010, 21:16

  My husband and myself are thinking of buying a property and moving to Spain on a permanent basis. I have concerns about IHT due to be being a few years younger than myself I could be the surving spouse. We have no children so I would probably leave the property to my nieces and nephews who are blood related to my husband what category would they be appropiate for IHT.

• Lawbird Lawyer Says:

  Tue, Jul 27th 2010, 08:47

  Dear Steffi They would be classified in Group IV. Yours sincerely Raymundo Larraín Nesbitt

• Rosemary Says:

  Tue, Jul 27th 2010, 17:03

  If I make a Power of Attorney over to my son, so can he sell my apartment after my demise, on the Costa del Sol without having to pay tax to take it over first. It's impossible that he could raise sufficient cash to pay the tax on the property. Thanks a lot

• Lawbird Lawyer Says:

  Thu, Jul 29th 2010, 11:03

  Dear Rosemary It would be an excellent idea if it weren't for a small detail. You still have to file and pay taxes on selling the property. And it would be you through your legal representative who would be doing this. He, knowing fully well that you have passed away, would have to pretend you are still alive on selling. This may cause him legal problems with the Spanish Authorities if caught. The POA is no longer valid on you dying if the proxy knows you've died. A son, your son, would logically know you've died on selling the property. Its a risk he's taking. In any case let me write once more that Spanish Inheritance tax has been grossly overblown over the last couple of years by a minority with vested interests in scaring people to hire their services to waive paying IHT. Normally this service is a one-trick pony, meaning they only give you THE one and only solution. When in fact there are many legal tools available to mitigate exposure to Spain's dreaded IHT: Ways on How to Avoid Inheritance Tax on Spanish Property - 22nd June 2005 IHT is high for the follwing groups of beneficiaries: 1. Non-relatives (i.e. friends) 2. On inheriting large estates 3. On the inheritor being non-resident in Spain (i.e. domiciled in the UK) and therefore cannot take advantage of lenient regional tax allowances in combination with one or both points above. This bars them from benefitting from generous regional tax allowances in lieu of the more draconian State law. However some regions in Spain require you have taken resident status for a number of years prior to the death, i.e. five years. Please read my article on IHT in Spain for more details: Spanish Inheritance Tax: Advantages of Making a Will in Spain - 3rd September 2009 Sincerely Raymundo Larraín Nesbitt

• Talia Says:

  Thu, Jul 29th 2010, 16:44

  Dear Sir/Madam, my father passed away in December. He jointly owned an apartment in Mazarron with my mother. It was on he market before he died for 90,000 euros. Before we can sell it we obviously need to pay IHT. The beneficieries are my mother, myself and 2 siblings. I am extremley worried we cannot afford to pay inheritence tax as we have no savings whatsoever. (siblings are both at university and I am a single mother.) I dont even know how much it is? What would happen now? Can we just give up the apartment to the spanish state? It is not ideal but I am scared of us all owing huge amounts of money, Thank you.

• Talia Says:

  Thu, Jul 29th 2010, 16:45

  Dear Sir/Madam, I forgot to mention that my mother and father were not resident in spain. Thanks again

• Rosemary Says:

  Thu, Jul 29th 2010, 22:47

  Thank you so much Raymundo for taking so much trouble with my query. Maybe a POA would be helpful in the meantime, in case I degenerate slowly + cannot take care of my own affairs. Would a POA need to be made in Spain ? Thank you so much for your reply - I'm now going to read your articles. Kind regards - Rosemary

• Lawbird Lawyer Says:

  Fri, Jul 30th 2010, 09:12

  Dear Talia On a property that is worth only 90,000€ and you are 4 beneficiaries inheriting presumably 25% each you are worried on paying a high IHT? You do NOT need to give away the property much less to the Spanish Tax office (!) unless you love them for some bizarre reason. I repeat once more, there is a minority of unscrupulous people that have vested interests in scaring the wits out of foreigners (particularly non-residents) into hiring their services (which is basically only one) blowing Spain's IHT out of all proportion. I've even read brochures in which they advise that normally it will be neccessary to sell the Spanish house to pay off the high IHT tax bill (!!) unless you hire them as on average Spain's IHT is 40/50% or even more of the value of the estate. This is highly misleading if not downright false. Please read carefully the articles I quote in my prior post above. Spain's IHT is only high when inheritors are: a) non-relatives (i.e. friends) or distant family members b) and or the estate bequeathed is of a high value. In your case you are close relatives (next-of-kin) and the value of the estate is very low. Your tax liability will be nil or close whether all of you are resident or not in Spain. And even if you had something to pay you can pay in installments and/or request a deferral on payment paying over the next 5 years. But this won't be your case, rest assured. Yours sincerely Raymundo Larraín Nesbitt

• Lawbird Lawyer Says:

  Fri, Jul 30th 2010, 09:22

  You are welcome Rosemary. A POA can be signed in England if you wish, it is compeltely unnecessary to travel over to Spain to grant one, unless you want to enjoy the splendid weather! The POA would have to be drafted by a Spanish lawyer, such as ourselves, in double column English-Spanish. We can refer you to UK notaries if you wish. If your mental state should change for the worse, God forbid, then the POA would prove extremely useful to your son whilst you are alive to manage your worldy affairs. It's a clever solution that many opt for. Regards Raymundo Larraín Nesbitt

• Talia Says:

  Fri, Jul 30th 2010, 17:10

  Dear Raymundo, Thank you for your reassurance on this subject. I think, as you say, I have been reading too many scare stories on the internet! I had worried myself sick over this as my family does not have a huge amount of money. I am due to see a soliciter on Monday to organise the sale of the property. Many thanks once again. Talia

• Lawbird Lawyer Says:

  Mon, Aug 2nd 2010, 10:28

  You are welcome Talia. I agree, far too many scary stories being told with vested interests lurking behind. Regards Raymundo Larraín Nesbitt

• steffi Says:

  Mon, Aug 2nd 2010, 20:51

  I have major concerns, I have been looking forward to moving to Spain and this might not happen due to reading the above. My heirs will not be blood related to me as they are siblings/nieces and nephews to my husband.Am I correct that they might have to pay 82% IHT.Is this common in Spain.

• Lawbird Lawyer Says:

  Tue, Aug 3rd 2010, 10:08

  Correct Steffi, in the most extreme cases Spain's Inheritance Tax may reach a whopping 81,6% which is tantamount to expropiation in my opinion. I include this in my article on Spanish Inheritances: Spanish Inheritance Tax: Advantages of Making a Will in Spain - 3rd September 2009 Spanish IHT most onerous cases are related to the transfer of large estates or assets bequeathed to distant relatives or non-family members such as friends (Group IV). It is in both of these cases, which are a minority really, in which the IHT liability can be high, too high, reaching even 81,6%, which is tantamount to expropriation in my opinion. Hence the need of tailored tax planning which may indeed justify setting up corporate structures, for tax mitigation purposes, on such cases. The key to successfully mitigate Spain’s IHT is to plan ahead prior to the purchase of a property in Spain. That said, 82% is the maximum and you can only attain it with multipliers taking in mind a series of factors such as the beneficiaries already owning considerable pre-existing wealth in Spain as well as the taxable base being above 800k. It is very very difficult to reach such a high percentage. Spanish Inheritance Tax: How much is it? - 1st February 2000 I'm aware that some unscrupulous companies (none of them law firms) over the last two years are quoting 82% of IHT as if this was the normal rule and happened everyday to non-resident beneficiaries. I've never seen such an extreme case and we deal with inheritances on a weekly basis. So unless your non-resident beneficiaries are already seriously affluent real estate owners in Spain and you are bequeathing them over a million euros worth each you will not reach such high percentages as you quote. But even so it will be very high. Unfortunately we do not give free tax assessments unless we are hired. In any case, following what you write, if you still haven't bought the property yet you are in an ideal position to mitigate future IHT exposure to your heirs. As I write in my article above: "The key to successfully mitigate Spain’s IHT is to plan ahead prior to the purchase of a property in Spain". Besides there's an ongoing trend to abolish IHT in Spain as well as making all non-resident beneficiaries benefit from the lenient tax allowances which are currently applied only to residents: EU Pulls the Stops and Vows to Put and End to Inheritance Taxation Discrimination on Non-Resident Beneficiaries Inheriting in Spain - 20th May 2010 Sincerely Raymundo Larraín Nesbitt

• Spanish American Says:

  Tue, Aug 3rd 2010, 21:26

  Dear Lawbird Lawyer - Could you please explain the tax consequences of the following situation? My father - a Spanish citizen living in both the US and Spain - leaves in his will a securities portfolio of approximately $500,000 Euros and a piso in Madrid worth ~$500,000 Euros, additionally there is a small apartment near Valencia worth ~ 150,000 Euros. His 3 children are the only beneficiaries - he is divorced. What are the tax implications? How much would we owe individually or collectively? Thank you so much.

• Lawbird Lawyer Says:

  Wed, Aug 4th 2010, 09:46

  Dear Sir or Madam I'm sorry, we do not make free tax assessments. You would need to hire us to draft you a report on the tax liability of each of the three beneficiaries. Please contact us for a quote on said report. Sincerely Raymundo Larraín Nesbitt

• Andrew Says:

  Wed, Aug 18th 2010, 20:49

  Hi There, My uncle died last month in alicante un fortunately he left no will. he was divorced from his wife who lives in a nursing home in alicante, he had a 5 bedroom property the value I have no knowledge of but he left instructions that my aunt could if she so wished in the event of his passing live in the house untill her death. this we are told would not be physically possible as she is 96 and cannot do anything for herself. My uncle is survived by his three sisters who are all very elderly and are not familiar with spanish inheritance laws. would it be possible for you to give some basic guidence in what we should do and possible up front costs we would expect to incurr. many thanks in anticipation of any help. Andy

• Lawbird Lawyer Says:

  Thu, Aug 19th 2010, 16:25

  Hi Andy Without detailed information I cannot give you an accurate quote. On inheriting an estate in Spain the costs woudl be as follows (broadly speaking): 1. Lawyer's fees. Minimum €3,000 plus 18% VAT. Normally higher (average being approximately €5,000 plus VAT). 2. Spain's Inheritance & Gift Tax (IGT, for short). State law would apply as presumaby all beneficiaries are non-resident in Spain. The exact amount levied depends on multiple parameters. 3. Plus Valía tax. Tax on the incraese of value of the land. 4. Land Registry fees. 5. Notary fees. I would advise you to read the following articles written by us which will give you an idea: Spanish Inheritance Tax: Advantages of Making a Will in Spain - 3rd September 2009 Spanish Inheritance Tax: How much is it? - 1st February 2000 Sincerely Raymundo Larraín Nesbitt

• Ron Says:

  Wed, Aug 25th 2010, 14:18

  You mentioned that there is a significant allowance if a spouse inherits (95-99%) so long as the spouse is "fiscally resident". Can you tell me what this means and how you can determine whether you are or not. Thanks

• aflores Says:

  Fri, Aug 27th 2010, 15:35

  Hello Ron, In order to be fiscally resident you have to apply for residency at the Police Station. Generally speaking (and legally applicable in most regions in Spain), one has to be resident for at least 5 years prior to the death of the testator that gave rise to the right to inherit. I can however share with you a secret: in Marbella, we are registering all the clients who we represent for inheritance matters with the police station, as residents, just a few days before submitting the deeds and paying the taxes (with the allowance!). I hope the Oficina Liquidadora de Marbella (Tax Office) does not read this (they happen to be 3 floors under us)!

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