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Spanish inheritance tax

Spanish inheritance tax

Postby Marley56 » Thu May 16, 2019 6:51 pm

Hi can anyone advise if me and my husband bought a property here in spain for approx €100,000 in joint names, sadly if one of us dies we have been told that the other surviving person will have to pay at least €10,000 inheritance tax to take over his or her half of the property even tho the will states it will go to the surviving partner can anyone tell us what's true and what is not as i think people are not told the truth, regards Julie and graham
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Re: Spanish inheritance tax

Postby Chrisdee » Thu May 16, 2019 6:57 pm

Yes you have to pay on the half you inherit
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Re: Spanish inheritance tax

Postby Babu » Thu May 16, 2019 7:45 pm

You don't say whether you are resident or not or whether your will is UK or Spanish but it does make a difference . . .
Spain doesn't give special allowance to a property like the UK (which is why you paid 10% tax when you bought it - resident or not) You do get a tax free amount on inheritance but it is very small compared to UK. . . I doubt you would pay €10,000 tax on half of a €100k house, but it would depend on what other assets are inherited.
If Spanish resident then by default all the (worldwide) assets come under Spanish tax law, if non-resident and a suitable Spanish will is in place then only Spanish assets are liable, the remainder come under in this case, UK law . . .
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Re: Spanish inheritance tax

Postby iant » Thu May 16, 2019 8:11 pm

I do not think the advise given is accurate. I would seek professional advise for peace of mind. It is very dependent upon individual circumstances.
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Re: Spanish inheritance tax

Postby marcliff » Thu May 16, 2019 9:19 pm

It will depend on several things. Whether you are resident or non resident. Your age. How long you have lived in your property. Your relationship to the deceased.

Firstly, residents.
If you are a resident you will pay no inheritance tax at all due to the allowances given in the Valencia Region. For children, there is no tax to pay if the estate is less than 100,000 euro and then there is a 75% discount on property over that up to very expensive.
In the Valencia region then you pay no tax at all if you are over 65 and have lived in the property for more than 3 years.

Next, non-residents. Spain changed all its rules under a regulation from the ECJ to say they can't treat EU residents differently to EU non-residents back in 2015. (who says the EU is useless and does us no good?). You are therefore not liable to any inheritance tax at all. Even before the ECJ ruling then inheritance tax was very low.

You can tell whoever told you you'd have a big inheritance tax bill then you can tell them that they are living in the past.

Now, when UK leaves the EU, who knows. Except that, in Feb 2018, the Spanish supreme court ruled that EU and non-EU citizens should be treated the same.
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Re: Spanish inheritance tax

Postby Paulvickis » Thu May 16, 2019 9:34 pm

I am buying a house in Spain at the moment on lo crispin and is over 100000 euros, i did post a feed on this matter but was taken down ? Maybe they thought i was a company but who knows lol
The laws are forever changing on this matter and with brexit then yes who knows but there are more secure ways to avoid any of this inheritance tax problem .
I am using a process at the moment that i researched long and hard but decided it saves all the worry about death duty’s in Spain or any other country and i do not have to worry about Spanish wills
Feel free to pm me any time
Hope this helps
Paul
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Re: Spanish inheritance tax

Postby marcliff » Thu May 16, 2019 9:47 pm

Oh, and just as an aside, even if the old rules applied and you were a non-resident, then the amount of tax to pay on your half of the property at 50,000 euro would have been just over 3,000 euro. You only got the Spanish national allowance and then paid a certain amount of tax (from 7.5% up to 8000 euro and 10.2% tax on the remaining up to 34,000 euro).
So the 10,000 euro was a bit of an exaggeration even before the rules changed.
I also overheard someone in a bar shouting the odds that you have to pay the inheritance tax with a week. Also a load of expat misinformation as you have 6 months in which to pay it and can pay in instalments if you so wish).
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Re: Spanish inheritance tax

Postby Marley56 » Fri May 17, 2019 8:24 am

Thank you all very much for your help on this matter will def seek advice, we are married and seeking to get residential also.
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Re: Spanish inheritance tax

Postby Kenbo » Fri May 17, 2019 9:11 am

Marley
Whoever it was who told you about the costs for Inheritance tax are very ill informed, you have done the right thing in seeking second opinions from our forum members, some of whom are very well informed but even they would tell you that there is no substitute for obtaining the correct legal advice as they will know what the current laws are.
Could you be more specific and say where in Spain you are thinking of buying ? This forum is based in the Valencian region and as such most of the replies you have received will relate to this region.
Different areas of Spain have different allowances towards Inheritance tax, for instance, just down the road in the Murcian region the allowances were less generous and therefore you would have paid more tax, recently the Murcian region has made changes and are now more generous.
In 2014 my wife passed away and I went through the Inheritance tax process via an excellent solicitor. We are non resident and have a Spanish will, I think having a Spanish will is the simplest route rather than stating in your uk will what you would like to happen to any Spanish property.
Our apartment was valued at roughly €80k so inheritance tax was due on my wife's half of the property, the whole bill including solicitors fees, notary, registration came to app €3500.
As Marcliff has mentioned an EU ruling forced Spain into taxing non residents at the same rates as residents, this gave an allowance of up to €100,000 where no tax would be due, therefore my solicitor claimed back the tax that I had already paid (app €1250 from memory ) and so you can see that the whole process cost me app €2350, a long long way away from your informants information.
These circumstances were specific to us and there could be slight variations but ours was a straightforward situation.
Do not let these bar room barristers put you off looking for a property in Spain, we have had our holiday home for 17yrs now and it was one of the best decision we ever made....but do your home work first, good luck.
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Re: Spanish inheritance tax

Postby marcliff » Fri May 17, 2019 9:34 am

Murcia Region used to be the Spanish national allowance of just under €16,000. They changed late 2017 and,from Feb 2018, now give a 99% discount to spouses and children on any tax. In other words, they haven't abolished it but have set the allowance so high that you will pay no inheritance tax.
Of course, that might change and it is always easier to change a tax rate rather than restart it hence the 99% allowance.
And just in case it seems too good to be true, this from a legal site regarding the Valencia Region:

In the Region of Valencia, no inheritance tax or donation tax is payable between spouses; Between parents and children there is no tax to be paid for inheritance or donations of less than 100,000 € and there is a 75% bonus for inheritance or donations from that amount onwards

The bit about having a will showing inheritance is to be dealt with in the same way as your home country is important otherwise the Spanish inheritance laws come into force which gives relatives rights to the estate and the spouse could only end up with one third of the assets (depending on number of children, step children etc).
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