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Inheritance Tax

Inheritance Tax

Old Jul 10th 2005, 10:12 am
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Default Inheritance Tax

Does anyone know what the tax rate is on inheritance tax in Spain as I feel we need to look at life insurance just in case one of us gets lumbered with a huge inheritance tax bill which we can't afford to pay.
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Old Jul 10th 2005, 12:57 pm
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Default Re: Inheritance Tax

This is one of those things that you need to give long thought to in terms of becoming a resident. If the assests are outside of Spain and the recipient is non resident that Inheritance Tax isn't payable in Spain.

The tax bands range from 7.65% to 34% depending on the amount.
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Old Jul 10th 2005, 2:21 pm
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Smile Re: Inheritance Tax

Hi glynis,

This is a very complicated subject. All sorts of complications depending on marital status, closeness of relationship ie.son or second cousin twice removed, resident or non resident, ownership status and where your will was made. Extensive reading or a good adviser is needed. A good starting point is "You and the Law in Spain" by David Searl who has lived in Spain for some years and updates his book every year. The latest edition is just out and is available at £19,95 but don't try amazon where last years edition is all they offer second hand at £63+. It is published in Spain by Santana in English so it might be available locally.

Regards,

John.


Originally Posted by glynis
Does anyone know what the tax rate is on inheritance tax in Spain as I feel we need to look at life insurance just in case one of us gets lumbered with a huge inheritance tax bill which we can't afford to pay.
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Old Jul 10th 2005, 3:52 pm
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Default Re: Inheritance Tax

Originally Posted by John & Kath
Hi glynis,

This is a very complicated subject. All sorts of complications depending on marital status, closeness of relationship ie.son or second cousin twice removed, resident or non resident, ownership status and where your will was made. Extensive reading or a good adviser is needed. A good starting point is "You and the Law in Spain" by David Searl who has lived in Spain for some years and updates his book every year. The latest edition is just out and is available at £19,95 but don't try amazon where last years edition is all they offer second hand at £63+. It is published in Spain by Santana in English so it might be available locally.

Regards,

John.
Just to clarify, we are resident in Spain and have made a will leaving our Spanish property to each other and then to the children jointly. We also have a property in the UK but this would not be a problem due to the differing law on inheritance tax. Also is the tax paid on the present value of the property at death or on the declared value on the deeds?
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Old Jul 10th 2005, 5:55 pm
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Smile Re: Inheritance Tax

Hi.glynis,

I have a shelf full of books on buying a house in Spain they all seem to cover this subject in some degree but it is immensely complex and not at all like current English law. Since you own properties in both jurisdictions you need to have wills in both.

For Spain there is something called "usufructo" which could remove inheritance tax on the first death, to you, by skipping a generation but retaining the right of residence to the survivor. I stress again you have to read widely on the subject and use a lawyer to draw up the will in Spanish with an English translation which must be registered and lodged with the Notary at the Ayuntamiento. I can't help more but reading David Searl will give you a good start before you go to the Notary, I borrowed a copy of the 2003 edition from the Library in Milton Keynes yesterday so it is not impossible to get hold of at short notice. I have ordered a copy of the 2005 edition from "Ottakers" and they say it will be in on Wednesday.

My interest is in the chapters on "horizontal property law in English which is the law covering the "comunidad de propietarios" which has no equivalent in English Law but all of us will have to get to grips with in Spain unless we buy in the boondocks.

Regards,

John



Originally Posted by glynis
Just to clarify, we are resident in Spain and have made a will leaving our Spanish property to each other and then to the children jointly. We also have a property in the UK but this would not be a problem due to the differing law on inheritance tax. Also is the tax paid on the present value of the property at death or on the declared value on the deeds?
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Old Jul 11th 2005, 9:39 am
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Default Re: Inheritance Tax

Originally Posted by John & Kath
I can't help more but reading David Searl will give you a good start before you go to the Notary, I borrowed a copy of the 2003 edition from the Library in Milton Keynes yesterday so it is not impossible to get hold of at short notice. I have ordered a copy of the 2005 edition from "Ottakers" and they say it will be in on Wednesday.

My interest is in the chapters on "horizontal property law in English which is the law covering the "comunidad de propietarios" which has no equivalent in English Law but all of us will have to get to grips with in Spain unless we buy in the boondocks.
Is it not possible to order direct from Santana? I did this when I bought my copy 4 or 5 years ago: service was prompt and it was a bit cheaper than other on-line sources at the time. Definitely recommended as an addition to other books covering living/buying/working in Spain.
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Old Jul 11th 2005, 9:49 am
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Smile Re: Inheritance Tax

Hi coralsoft,

Definitely agree with your last comment, don't know the web address for Santana if you can post that it would be helpful since I am suspicious that come Wednesday it won't have arrived.

Regards,

John


Originally Posted by coralsoft
Is it not possible to order direct from Santana? I did this when I bought my copy 4 or 5 years ago: service was prompt and it was a bit cheaper than other on-line sources at the time. Definitely recommended as an addition to other books covering living/buying/working in Spain.
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Old Jul 11th 2005, 10:06 am
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Default Re: Inheritance Tax

Originally Posted by John & Kath
Hi coralsoft,

Definitely agree with your last comment, don't know the web address for Santana if you can post that it would be helpful since I am suspicious that come Wednesday it won't have arrived.

Regards,

John
Wills all made in both countries. It is just the percentage of tax I need to know so that I can insure for the right amount to cover the Spanish tax bill. Have no intention of leaving it to the kids until after we are both gonners.
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Old Jul 11th 2005, 10:31 am
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Smile Re: Inheritance Tax

Hi glynis,

The tax is on a sliding scale and depends on value of property also the value may be reassesed by the tax office at time of death if they don't believe the submitted value.

Regards,

John.


Originally Posted by glynis
Wills all made in both countries. It is just the percentage of tax I need to know so that I can insure for the right amount to cover the Spanish tax bill. Have no intention of leaving it to the kids until after we are both gonners.
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Old Jul 12th 2005, 4:12 am
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Default Re: Inheritance Tax

From the last edition of Searls book ( ed 15 )

Hope it's useful, not checked or used the info myself.

Santana Books

[email protected]
www.santanabooks.com
UK representation
Aldington Books Ltd
[email protected]
www.aldington books.co.uk
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Old Jul 12th 2005, 6:44 am
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Smile Re: Inheritance Tax

Hi meseta,

Many thanks if it does not arrive tomorrow I shall order the 16th edition direct.

Regards,
John.

Originally Posted by meseta
From the last edition of Searls book ( ed 15 )

Hope it's useful, not checked or used the info myself.

Santana Books

[email protected]
www.santanabooks.com
UK representation
Aldington Books Ltd
[email protected]
www.aldington books.co.uk
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