Spanish Inheritance Tax: Advantages of Making a Will in Spain

[John Macpherson]

I'm a bit confused. As a non-resident intending to buy a property in Andalucia I thought my inheritance tax problems were gone as I could bequeath my 50% share to my two children, who are both non resident and over 21 up to a total property value of 750,000 euros. However later discussion seems to indicate that only residents obtain the benefits of having a taxable base below 175000 euros. Can you please clarify this?

[Yvonne Walker]

My husband and I are resident in Murcia and have made a Spanish will bequeathing our resoective 50% to each other and then our 3 children who are over 21 and living in the UAE and UK. Do the same rules regarding IHT in Andalucia apply in Murcia?

[kim anderson]

My parents have been residents of Lanzererote for 20 years. They own a property worth 1 million euros with no mortgage they have a Spanish will and an English will for a small amount of savings. There are 3 children what is the best way to save IHT. We can transfer to the children now if it would help they are all living in the UK.

[aflores]

Hello Kim,

Have a look at my blog post on the matter (I hate quoting myself ) after which we can discuss this in detail. As you can see, inheriting 300.000 Euros can be rather expensive (over 50k Euros) so it is important that you put some mechanism in place to avoid this.

From the information you tell me I would probably opt for incorporating a Spanish limited company (1% Stamp Duty plus around 2k Euros company incorporation costs) and then, within 3 years, have the shares transferred from your parents to you.

This would also help you avoid non-resident property income tax as companies don't pay this tax.

[aflores]

Hello Yvonne,

No, you have specific rules in Murcia which will be applicable between your husband and yourself, but not in respect of your children inheriting, as they are non-residents. Your inheritance tax will be 99% exempt in this case, without limitation.

[james kendrick]

my partner passed away recently and we only have an english will covering our spanish property. We are non;residents but are padron. Our property is in valencia region and worth £175000 euros. I am liable to pay IHT on my half?

[aflores]

Dear James,

Please accept my condolences in respect of the death of your partner.

IHT wil be applicable in this case, as you are a non-resident for tax purposes. Do you have a mortgage on your property?

Regards
Antonio

[Roy Maddick]

My daughter is a Spanish Resident living in Madrid.
She will inherit money when her Grandfather dies - will she need to declare this money and pay IHT?
Regards
Roy

[lawbird]

Dear Roy,

Yes, if her grandparents are in Spain, she will. However, bear in mind that depending on the amount being transferred she may qualify for a tax exemption.

Regards,

[lyndsay mcroberts]

Looking for advice, my in laws own a property near malaga no mortgage worth approx 170000 euros. My mother in law recently died they have no spanish will what would he be expected to pay in tax etc what is best way to proceed?