... and these can be considerable so well worth considering if possible (not in your case though, unfortunately).

Me again...this Spanish IHT is a nightmare !!

I have read that in certain areas (including Andalucia) spouses and children are exempt from IHT where the taxable value of the inheritance received is no more that €175,000 and the wealth of the receipient does not exceed €402,678 (The Olive Press). Can somebody just clarify that for me please as I am not sure whether that only applies if you are a resident.

I had not considered this at all when we bought, just knew that our assets would be under the UK threshold for IHT - never crossed my mind about Spainish liability, and the sums involved are horrendous.

It must be true if its in the Olive Press.
Here in Valencia if I were to peg it tomorrow my wife would pay hardly any IHT, but restrictions apply allegedly. When she pegs it and it's left to my daughter, a non resident, then daughter has to pick up the IHT subject to allowances

As I said earlier, the regional special allowances only apply to residents. They, and the beneficiary must also be residents in that region and have been so for 5 years.

There are slight differences in other regions but that is the case in Andalucia.

Thank you Mitzy and Fred, I have had so many pm's and emails about this with lots of people who did not realise the considerations of Spanish IHT/Gift tax...especially for non-residents.

Why don't people share? The total sum of shared knowledge would been enhanced and I am sure any personal bits could be anonomised.

People do share....but the thing is in a lot of cases people get told different information.....so things get a bit confusing to say the least.

The same things happen all over Spain, it depends who you speak to....

I have know 3 lawyers tell me 3 different things about a query I had.....I am not kidding.

I think John and Kath's point was that answering questions by PM rather than by posting on the forum denies other members of that information.

I agree with you that there are so many different interpretations of the rules that it is difficult to know who to believe.

Personally I prefer to look it up in the official sources and go by that.

It amazes me how often the "experts" who are paid to provide the information are totally wrong or out of date.

I know of at least three accountants/lawyers internet sites who can't even get the basic tax rates and allowances right!

Oh right, I understand about the sharing now.

It is carzy though when those that would know, havent go a clue....

Sorry if this is a silly question/has already been asked but I read in a previous post that it is the recipient of an inheritance who pays tax in Spain. My question therefore is;

If one is a tax payer in Spain and receives an inheritance from the UK do you have to pay tax on it?

Yes you do. Residents pay tax on inheritances or gifts from outside Spain. Non-residents only pay tax on assets in Spain.

The double taxation treaty does not cover IHT so it is possible that you could end up paying tax in the UK on the asset (via the estate) and also in Spain on the same asset.

In this case you can deduct any tax paid in the UK from the tax paid in Spain.

Too right John, many people did not realise that IHT would have to be paid by their family and, as I have said, there are different considerations for varying circumstances. Any and all info very gratefully received as, following that, folk can take out what applies to them, check it, then check again and decide what to do....IF you can do anything to minimise the financial impact on those who inherit. Thanks to those who have helped already by posting info.

Just "sell" the property to the daughter.

You all rock up to the notary, daughter hands over cheque, signs all papers, gets escritura etc. Everything stamped several hundred times, "spanish style".

But.

You don't cash the cheque.

IHT problem solved, unless daughter pegs it first.

Oh. And assuming she lets you live in the house/apartment, of course!

... but you will have had to pay 7% transfer tax plus all the expenses - not a cheap option surely?

And if they check and find you didn't cash the cheque it is treated as a gift and the gift tax (exactly the same as IHT) is payable within 30 days.

It's not as simple as it looks.