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Thread: Spanish Inheritance Tax: How much is it?

  1. #41
    Senior Member
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    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 LarraÃ*n Nesbitt

  2. #42
    Talia
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    Default Spanish Inheritance Tax: How much is it?

    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

  3. #43
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    You are welcome Talia.

    I agree, far too many scary stories being told with vested interests lurking behind.

    Regards
    Raymundo LarraÃ*n Nesbitt

  4. #44
    steffi
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    Default Spanish Inheritance Tax: How much is it?

    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.

  5. #45
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    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 LarraÃ*n Nesbitt
    Last edited by Lawbird Lawyer; 08-03-2010 at 10:16 AM.

  6. #46
    Spanish American
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    Default Spanish Inheritance Tax: How much is it?

    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.

  7. #47
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    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 LarraÃ*n Nesbitt

  8. #48
    Andrew
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    Default Spanish Inheritance Tax: How much is it?

    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

  9. #49
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    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 ValÃ*a 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 LarraÃ*n Nesbitt

  10. #50
    Ron
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    Default Spanish Inheritance Tax: How much is it?

    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

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