Hello Philip

Welcome to the belegal forums.

In answer to your questions, please note that Spanish law makes no provisions for IHT exemptions when it comes to non-residents. These exemptions do exist, but only if you were legally residing in one of the regions which make provisions in respect of IHT.

Having said this, your case is the typical scenario in which inheritance tax can be almost negligible if the will is structured properly.

For our calculations, we will be using the figures that appear on the article:



The article is 12 years old, but everything mentioned there is still in force.

The calculations are the following:

Code:
Value of Assets		300,000.00 € (including 'ajuar')			
				
	
Scenario 1: Spouse and Children Inherit on First Transfer. Children on Second					
	
				
First Transfer
					
Percentage to be transfered	26%	78,000.00 €			
					
Heir	Share	Allowance	Taxable Amount	Tax Percentage	Total Tax

Spouse     19,500.00 €	15,956.87 €	3,543.13 €	7.95%	271.05 €
Children 1 19,500.00 €	15,956.87 €	3,543.13 €	7.95%	271.05 €
Children 2 19,500.00 €	15,956.87 €	3,543.13 €	7.95%	271.05 €
Children 3 19,500.00 €	15,956.87 €	3,543.13 €	7.95%	271.05 €
	
				
Second Transfer
					
Percentage to be transfered	32.50%	97,500.00 €			
					
Heir	Share	Allowance	Taxable Amount	Tax Percentage	Total Tax

Children 1	32,500.00 €	15,956.87 €	16,543.13 €	9.35%	1,343.00 €
Children 2	32,500.00 €	15,956.87 €	16,543.13 €	9.35%	1,343.00 €
Children 3	32,500.00 €	15,956.87 €	16,543.13 €	9.35%	1,343.00 €
					
Total					5,113.20 €
				
	
Scenario 2: Spouse Inherits on First Transfer. Children on Second					
		
			
First Transfer
					
Percentage to be transfered	26%	78,000.00 €			
					
Heir	Share	Allowance	Taxable Amount	Tax Percentage	Total Tax

Spouse      78,000.00 €	15,956.87 €	62,043.13 €	13.60%	6,536.49 €
	
				
Second Transfer
					
Percentage to be transfered	52%	156,000.00 €			
					
Heir	Share	Allowance	Taxable Amount	Tax Percentage	Total Tax
					
Children 1	52,000.00 €	15,956.87 €	36,043.13 €	11.05%	3,303.63 €
Children 2	52,000.00 €	15,956.87 €	36,043.13 €	11.05%	3,303.63 €
Children 3	52,000.00 €	15,956.87 €	36,043.13 €	11.05%	3,303.63 €
					
Total					16,447.38 €
Scenario 1 is clearly more favourable. On the first transfer, heirs would pay less than €300 each.

Note

  • If the childrent are under 21, further allowances are applicable.
  • The above calculations don't consider the declared pre-existing wealth of the heirs, which, in case of Group I and 2 descendants, could attract an extra 0% to 20% depending on how wealthy each heir is.


Taking a look at the above calculations, it is clear that structuring correctly a will is the best way of mitigating IHT over exisiting assets.

I'd like to take the opportunity to recommend staying away from services such as the ones described here:



Regards