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Thread: Statute of Limitations for Spanish Inheritance Tax

  1. #1
    annmarie mcivor
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    Default Statute of Limitations for Spanish Inheritance Tax

    My father has died recently and my mother has inherited his share of the house Value on deeds 185,000. Is there a way that she can avoid paying inheritance tax. We have heard that if you do not say anything for 4 years you will not have to pay the tax. Is this true and what happens after the 4 years?

  2. #2
    Senior Member
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    Marbella
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    Dear Madam,

    Actually it's 4 years and six months.

    After this timeframe has elapsed as from the death of your father you will no longer be held liable for IHT by the Spanish Tax Office.

    Please read my article on Spanish Inheritace Tax which has various of links to other articles of ours explaining ways to avoid/mitigate exposure to this tax.

    Spanish Inheritance Tax: Advantages of Making a Will in Spain - 3rd September 2009

    Yours faithfully,
    Raymundo LarraÃ*n Nesbitt

  3. #3
    Unregistered
    Guest

    Default inheritance tax

    Thank you for your reply - but could you tell me what happens after the 4 years 6 months go by - does she have to pay a tax then. Is she able to sell the house then. Does she inform the authorities after this time.

  4. #4
    Senior Member
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    You're welcome.

    The steps to be taken are explained in detail in my article above. The only difference is that IHT doesn't have to be paid now.


    Now what?

    Once heirs have all three (original death certificate, will certificate and a notarised copy of the testator’s last will) they may now obtain a Deed of Declaration of Acceptance of Inheritance (“Escritura de Aceptación de Herencia”) before a Spanish Notary. With this deed they are now able to file, pay and lodge the death duties.

    Once IHT is paid and lodged, not before that, will the property be registered under the beneficiaries name at the land registry where the property is located. Once registered, the property can be disposed of freely. Heirs cannot mortgage or sell the property to pay IHT as it still doesn’t belong to them.

    Yours faithfully,
    Raymundo LarraÃ*n Nesbitt

  5. #5
    Unregistered
    Guest

    Default

    sorry about this but she is extremely confused about what to do and is begining to panic about it. I need to be able to explain exactly what will happen in four years time.

    So when the four years are up she will not have to pay the inheritance tax approx 9,100 euro - she will only have to pay the cost of changing the deeds into her name - I presume that this can all be done through a spanish solicitor.

  6. #6
    Senior Member
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    She will need to hire a lawyer to sort it out in 5 years time, yes.

    A deed of acceptance has to be signed at a Notary public. The IHT has to be filed and lodged even though it is no longer payable. Only then can the property be lodged under her name.

    In any case, as per my article above, IHT payment can be requested to be differed or paid in installments.

    Waiting for the statutory limit to elapse has its risks and I cannot recommend it. If you are caught, the Tax office will make her pay dearly.

    Directors of bank branches for example are obliged to report to the Tax office the death of an account holder so that the account is frozen until the IHT is settled. You can also read this in my article.

    Yours faithfully,

  7. #7
    Unregistered
    Guest

    Default inheritance tax

    Thank you for your reply

    The value of my mothers property is 185,000 on the deeds. There are no other assets in spain or no mortgage or outstanding debs on the property could you tell me how much inheritance tax she should pay and what is the normal fee (approx) that a spanish solicitor charges for doing the inheritance tax.

  8. #8
    Senior Member
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    I'm afraid not.

    One thing is advising in general and another different matter is doing a tailor-made IHT calculation. You would have to hire us for this service.

    The reason is because Spain is divided into 17 different regions and each pass their own laws, besides the national ones, on IHT. So it´s a fairly complex and technical matter.

    The standard fee a Spanish law firm charges is in the region of 5,000€ plus 16% VAT.

    I take the opportunity to offer you our legal service on the matter:

    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 the following:

    • Requesting of 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)
    • 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.
    • Arrangement of payment of the applicable Inheritance Tax.


    Yours faithfully,
    Raymundo LarraÃ*n Nesbitt

  9. #9
    Trix
    Guest

    Default

    Hi

    My father died last November. We have got the acceptance of inheritance and the bank have now paid the inheritance tax. I have been told the notary will transfer the deeds into my name. The car is also being transferred. I am not sure how long this takes and how I will know that it has been completed as I live in the UK.

    The question I have is about Spanish bank accounts. How can I inform them that the inheritance is now mine? do I need another document to give to the banks so that they may transfer the accounts to my name?
    Your advice will be gratefully received

  10. #10
    Senior Member
    Join Date
    Oct 2008
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    311

    Default

    Hi Trix,

    Once you have received the acceptance of inheritance and the IHT has been paid, documentation will have to be presented at the land registry / ies where the property/ ies are registered. This registration process can take 2/3 months, depending on the land registry. The way to know it is ready will be to check now and then.This is another reason why it is recommendable to have someone in Spain to do this for you, or have the land registry contact them once it is ready.

    Banks can take around 1-2 months to change ownership of bank accounts and other contracts ( deposits, investment funds, etc). There is a whole list of documents that they will request from you (this may vary slightly from one bank to another so please check with them ), but in essence it is:

    Copy of the escritura notarial de manifestación and aceptación de herencia and evidence to show that the IHT has been paid.
    Marta Flores
    Legal Assistant at Lawbird
    Check My Profile

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