Spanish Inheritance Tax - Chapter 1

Published on 4/19/2010 in Taxes in Spain

Inheritances taxes are something that all families will have to deal with. Unfortunately, sooner or later our relatives will die and the taxman will be waiting for us. It is convenient to be informed to try to avoid or minimize these taxes.

Spanish lawThere are many controversies about Spanish inheritances taxes. Too many people providing professional Tax opinions and suggesting magical ways (company structures, fictitious mortgages, etc) to avoid inheritance taxes without having the proper qualifications. Taxman is not stupid and you must be careful about these “magical ways to avoid taxes “ which can be at the end a big problem.

I will try to point out in 3 chapters a summary of main answers and clarifications on Spanish Inheritance Taxes. These answers and comments come from inheritances cases and the enquiries and questions I have received from hundred of clients in 10 years of professional experience.

LAWS WHICH RULE INHERITANCE

Everybody must know that Laws which rule the Inheritance and estates are the ones of the nationality of the individual. Should you are Spanish; your inheritance will be rule according the Spanish Law. Should you are British; Laws applicable to your inheritance will be the British ones.

It is in reference to the legal way to distribute your assets, rights of relatives, etc. but not in reference the Inheritance taxes to be paid in Spain. Should you have any assets in Spain (real estate, car, bank account, shares, etc) you would have to pay Inheritances taxes in Spain it does not matter your nationality.

IMPORTANCE OF MAKING SPANISH WILL

Should you are the owner of any assets in Spain (real estate property, bank account, etc), it is recommendable making a Spanish will, despite the fact that making made a will does not affect to the amount of inheritance taxes to be paid nor to the legal rights of your relatives to inherit your assets. Not having a will does not mean that you assets will to the Government but to your relatives. Everybody must know that.

Therefore the main reason for making a Spanish will is to save time, money and worries to your relatives when you passed away. The solicitor of your heirs will also be very happy that you have made a Will because it will facilitate legal inheritance paperwork’s.

Having a Spanish will makes things easier (your wishes are clearly stated in writing and nobody can discuss them avoiding disputes between relatives), cheaper (as there are many expenses when translating documents on states from other countries), and quicker (Inheritance taxes must be paid within 6 months from the date of the death). Spanish wills make easier all Legal & Tax paperwork’s.

Spanish Wills must be signed in front of a Public Notary and the cost of making it is approximately 60 Euros. We recommend everybody doing it.

In next 2 chapters (to be published in next 2 newsletters) we will comment these other issues:

  • IMPORTANCE OF TAX RESIDENCE IN SPAIN.
  • THERE ARE NO MAGICAL WAYS TO AVOID INHERITANCE TAXES.
  • SPECIAL FAMILY CIRCUNSTANCES ( PEOPLE NOT MARRIED, HOMOSEXUAL, PARNERTS, ETC)
  • HOW MUCH ARE THE INHERITANCE TAXES ? SCALE OF INHERITANCE RATES IN ANDALUCIA.
  • EXAMPLE OF INHERITANCE CASE.
  • WHAT YOU MUST DO A PERSON OWNING ANY ASSET IN SPAIN.
     

 

Written by: Jose M. Lopez-Avalos

About the author:

Jose Miguel is a Senior Partner with Marbella Solicitors.  They have offices in Marbella, Malaga, Nerja and soon Manilva and they can help you with all your legal and tax matters in Spain.  Marbella Solicitors are one of the few law firms recommended by Eye on Spain.

Tel: +34 952 901 225

Fax: +34 952 901 226

E-mail: jose@marbellasolicitors.com

www.marbellasolicitors.com




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Comments:

dringman said:
Tuesday, January 21, 2014 @ 4:28 PM

Just had this e mailed is it correct?

Inheritance Tax (IHT) increases in the Murcia & Valencia Region
As of 11thJuly 2013 the Murcia region increased Inheritance Tax (IHT) payable by residents inheriting within this region. Before this time Group 2 Resident Beneficiaries (spouses, parents, biological & adoptive children over 21) of the Murcia community benefitted from a 99% exemption on assets they inherited within their region however, this has now been reduced to a standard allowance of 15,957 Euros. From 6th August 2013 Valencia resident spouses, descendants and ascendants had their personal free allowances upon inheritance, increased to 100,000 Euros, or reduced in the case of gifting. However, the exemption for assets inherited above the 100,000 Euros allowance was lowered to only 75%. There are no such exemptions for brothers / sisters / aunts / uncles / nephews /partners or friends.



peter-c said:
Thursday, April 22, 2010 @ 3:59 PM

I appreciate that the author is an expert in this field, but the article is written in such poor English that a bad impression is given - there is also a likelihood of misunderstanding, especially in legal matters such as this where accuracy is vital. Would it not be better to have an accurate translation of the Spanish?

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