Spanish Inheritance Tax: Advantages of Making a Will in Spain

[Patricia]

Hello Linda,

Welcome to the belegal forum.

If your son is title holder in the property, the IHT will be less when the parents pass away, so we advise that this is done. As owner of a percentage of the property, he will be inheriting less and therefore paying less IHT. Once he is co-owner of the property, he will be subject to pay the IRNR, that is, the Non Resident Property Income Tax and one other local (council) tax, the IBI. Additionally and finally, the waste collection levy is also payable although this is a negligible amount.

Spain has a double taxation agreement with UK where taxes on Spanish property are always paid in Spain.

Best Regards,

[sarah]

my father is a third share owner of a villa privatly owned in cancelada one owner has now died two weeks ago they all made spanish wills but the owner that died didn't make a uk will what is the proceedure now there was an agreement between the owners and it was written in the wills that if one owner died the share automatically goes to the remaining owners the info i have been reading it seems it doen't matter what the will said so does it mean that his son will now inherit his share automatically regardlessof twhat his spanish will said the proprty is currentlu up for sale what now happens when it is sold

[Patricia]

Hello Sarah,

Welcome to the belegal forum.

The Spanish will that your father did needs to be respected in this case, unless any legitimate heir in UK may want to contest it, as in Spain the legitimate rights of the offspring always prevail. In that case, if the house was sold, and in the event that this third share had been trasnferred to the son of the deseased, he would need to agree with the sale and obviously receive his share of the profit on the sale ( if any ).

Best Regards,

[Linda]

Hello My partner and I are not married. We have a mirrored spanish will. We are residents. We have padron. Our property in Murcia is worth €300,000. Should we marry, we are residents (should we be fiscal residents). Do we hve to complete a tax return. Our pensions and saving are held in the UK. Regards Linda

[Marta]

Hello Linda,

If you spend more than 183 days per year in Spain, this will automatically make you a fiscal resident in this country. This means that you will to present your income tax return and declare your worldwide income in Spain. There is however a double taxation treaty between the UK and Spain, and this will avoid you paying taxes tyce.

Note that being registerd at the town hall does not make you a resident in this country. In order to enjoy the benefits this staus might bring you, you you will need to register at your local 'Comisaria de Policia Nacional' and request your 'certificado de registro de ciudadano de la Union Europea'.

[Marti]

Advise please. Me and my husband bought a Casa in the Valencia region just over 10 years ago. We own it in joint names with a small mortgage. We have a Spanish and UK will but need to change both and want to leave each other our half share and on the death of the last to survive we want to leave the Casa jointly between our child and 3 grandchildren. Is this the most sensible thing to do? The Casa is only worth 150,000 euros now. Also should we sell the Casa prior to any death how much would we have to pay in tax? We are non resident in Spain. Many thanks

[Barry J]

Well done with this forum, most infomative.

I have clients who own property in Alecantea,and have assets in the UK in excess of the UK Nil rate bands.
Without wishing to get bogged down with numbers, and in consideration of UK IHT and world wide assets,if any Spanish Iht had been settled, do you know what the position would be in the UK regarding the inclusion or otherwise of the Spanish property for Uk estate Totals?

[Marta]

Hello Barry J.

Thank you for your comments. Note that Spanish IHT is paid on Spanish property exclusively. It has no interference with UK IHT.

[Patricia]

Dear drfhm,

We understand that your only asset is set in Spain, and therefore, even if you have written a will in UK, the Law that is to be applied at the time is the Spanish Law, that protects the rights of the legitiamte heirs, that are the children. You do not mention if you have chidren but please be aware that if this was the case, they would have a right to inherit your share over your wife´s if they contested the will.

The inheritance tax amount has to be paid by the inheritor/s. Your spouse can have a certain reduction due to the Family relationship and also the corresponding deductions depending on the province where the property is located, or province where you have been residing before death.

If you hold usual residence in the property object of inheritance and your wife will also use the dwelling as a usual home after your death, that is what we understand from your message; she will be exempt of the IHT. In the rest of the cases this tax is compulsory. The amount of the tax will depend on the value of the property and number of heirs.

Please feel free to read the following article written by one of the lawyers at the Lawbird team about the Spanish tax system, there are various examples and scenarios so you can have a clear picture on how the process is and the taxes you may expect to pay.
http://belegal.com/articles/showArti...-tax-spain-iht

I hope this information has been of help.

Best Regards,

[zannado]

Dear Sir,
My husband recently inherited 50% of a property in La Nucia, alicante, the other 50% belongs to his wife who remains in the property having the use of it until she passes. We have paid the inheritance tax at great finincial difficulty as we are not able to recoup until the propert is sold but now we are being told we also have to pay capital gains tax. Please advise as we are very concerned that we will have to go into more debt to do this.

Kind regards Zanna