Re: Inheritance Tax
 

Hello Everyone

Thanks for all the posts seem to have set of a great debate. We plan to retire and stay in the Canaries and become part of the community. I want to learn Spanish. We will only pop back to UK to see family etc but we do need to know the tax system

Regards Sue

Re: Inheritance Tax
 

The important thing is that you have taken the trouble to find out what the situation with regard to tax etc is in Spain well before to make the move.

If more people had bothered to do that before being seduced by sun and Sangria there would be fewer people having problems down the line.

Keep asking the questions - I'm sure someone will have the answers based on experience.

Re: Inheritance Tax
 

Thanks Fred

I certainly want to go with eyes wide open. We will be living there and it will be our home just like the UK and not a holiday. Though I do plan to relax more th a we do in the UK.

Sue x

Re: Inheritance Tax
 

Yes, I can see just how bad the situation could get.

From what you have described the main problem seems to be the succession issue rather than the tax. With 10 inheritors the individual tax would be low, but the other problems compounded by the numbers involved.

Of course it isn't just Spain that has these archaic laws, many other countries have them in one form or another. The UK is one of the major exceptions where people can even leave their entire estate to a pet dog!

The consolation to us foreigners that we are not bound by them although the tax implications are still there.

I do understand that the situation where residents of certain regions get special allowances and non residents do not, is being challenged in the European Courts in the same way that the original Capital Gains Tax regime was eventually deemed to be discriminatory and Spain had the change the law. Hopefully the same will happen to IHT but it won't make the basic problem go away.

Re: Inheritance Tax
 

Hi Fred

Thanks it seems a real problem but looking forward to making the move x

Re: Inheritance Tax
 

Why should non residents expect to get the same IHT allowances if they have not been resident there, and contributed to the income tax system?
Having said that, the regional allowances should be abolished anyway and a realistic state allowance brought in.

Re: Inheritance Tax
 

I am willing to pay tax. I am buying a house of the same value as here in the UK. Out government do not charge inheritance tax on that. I am choosing to live in Spain not my children. Why should they pay tax on a property they have no I interest in inheriting. By living in Spain we are already contributing to your wealth.

Thanks for you comment.

Re: Inheritance Tax
 

If they don't want it, then my advice would be to rent and give them some cash each year.

Re: Inheritance Tax
 

They have been given money before our death from a policy we set up when they were babies which they are happy with. They are simply not interested in living in Spain and want us to enjoy our retirement.

It seems that we can make a will in Spain setting out our wishes anyway.

Re: Inheritance Tax
 

A will states who you want to leave your assets to, but IHT will still have to paid, on your worldwide assets,even if you have an English will as well!

Re: Inheritance Tax
 

Surely only if the person inheriting is Spanish Resident any inheritance held in UK and inherited by UK Resident is dealt with in UK. If the children don,t want to inherit Spanish property and pay the tax then they Dont inherit it.

Re: Inheritance Tax
 

Your post is confusing
I am saying that wills just clarify who you want to leave your assets to. They don't free you from inheritance tax.

Re: Inheritance Tax
 

I am afraid that what the UK Government does with regard to inheritance tax for its residents is really irrelevant - if you choose to make the move and become a resident of Spain, then you are subject to their taxation regime in all respects, not just the bits you agree with, you either have to take it warts and all, or not move if you feel that strongly about it.

I have read in the past comments from some people who have purchased their property in their children's names, with them having a usufruct which gives them the legal right to reside in the property until their death. This is, as far as I'm aware, quite legal. However, should you wish to sell the property for any reason, then of course your children would have to agree to do so and transfer the proceeds back to you. You might or might not be happy with that arrangement.

Re: Inheritance Tax
 

All I am saying is if the OP has assets in the UK inherited by children who are UK Residents then that would be dealt with by UK IHT not Spanish. Obviously if the person inheriting is Spanish resident then yes it would be different. As would the inheriting of Spanish property by a non resident but they can choose not to inherit.
Your post I replied to made it sound like his children in UK would pay Spanish IHT on Worldwide Assets.

Re: Inheritance Tax
 

Also the children would be non resident property owners and need to submit and pay non resident tax as well.