Inheritance tax Mallorca
 

Hi Everyone

Hope someone can help and give me advice.
My parents have a property in Mallorca but sadly my dad recently passed away.
This property was jointly owned 50/50 and they have a Spanish Will but can someone offer me some light as to how much % inheritance tax is likely to be as I see a fair few different figures and dont know what we are really looking at facing financially.

Appreciate your help with this.

Will

Re: Inheritance tax Mallorca
 

It's very complicated and will depend on a number of factors.

Were they residents and was it their permanent home?

Did your father's will leave his share to your mother or was it left to you?

How much is the property worth?

The Balearics have a pretty generous IHT regime so the chances are it will be very low - it just depends on the answers to the above questions

Re: Inheritance tax Mallorca
 

Hi Fred James

Many thanks for your reply. I know it all has to be done through notaries etc and the Will has to be 'accepted' as they say infront of the notary and so on.
In answer to your questions:
Were they residents and was it their permanent home?: not residents so not their main home. It was purely a holiday home.

Did your father's will leave his share to your mother or was it left to you?: Yes the share from my dad was to pass to my mum. It only went to myself if anything happened to both of them.

How much is the property worth?: approximately 120,000 Euros.

We deal with an administrator for the wealth tax out there and he quoted an approximate amount but I feel that is excessive (inheritance tax, notary fees, register fees and fees to the town hall) so looking around for advice and will seek different legal places for the costs as each solic/notary im sure like in the UK will all charge differently to deal with things. Probably through where the will is held anyway.

Re: Inheritance tax Mallorca
 

I won't go into the maths but I make it €600 plus legal fees etc. (assuming there haven't been any major changes in the last couple of years).

However these numbers can change overnight if there are sudden changes in the allowances. They are set by each Autonomous Community and vary a lot.

All wills are held centrally in Madrid.

Re: Inheritance tax Mallorca
 

Thanks Fred James. That was around what I was thinking too after reading articles about 1% inheritance taxes up to 700,000Euros.
Obviously have to confirm through the legal channels but just been getting rough ideas. The administrator told us 6,800! which is why I feel something is not right...unless he pressed too many numbers haha.
I believe the notary out there has the will but knew about them being registered centrally in Madrid.

Do you know if a notary in the UK can access this from Madrid because the local notary in Mallorca said we have to go to their office and provide passport. Just means a trip over there which doesnt bother me :) just more hassle for my mum if dont have to. I would assume a UK notary can gain access to do it from here.

Anyway really appreciate you confirming something close to what I was thinking....but who knows what new laws they will invent haha.

Re: Inheritance tax Mallorca
 

In fact, looking at the latest allowances again it may be even less than €600 - there is no way it can be anything like the €6800 figure!

Sorry, I can't answer the question about the notary. Wills are held in Madrid but the Notary where the will was signed should have a copy. However, in theory, a second will could have been made at another location and the first Notary might not know that, which is why there is a central database.

Re: Inheritance tax Mallorca
 

Well fingers crossed haha, certainly doesnt make sense that amount but who knows. I have asked him how he gets that figure!
I think he is getting mixed up with income tax which would be about 4500 if earning 60k.

You have been very helpful anyway. I will check back when I get official figures so if anyone else needs advice it may help as all these laws are a minefield.
Thanks again

Re: Inheritance tax Mallorca
 

Income tax would be a great deal more on 60k.

Re: Inheritance tax Mallorca
 

Are you sure the term "wealth tax" is correct?

Wealth tax normally kicks in when you have assets in excess of 700k plus allowance for main home. You then talk about IHT which is nothing to do with wealth tax .

:confused:

Re: Inheritance tax Mallorca
 

Hi
No I was merely saying that we deal with this Spanish guy when paying the yearly wealth tax. I thought wealth tax was a countrywide tax? Well anyway in Mallorca they charge wealth tax....another one of the joys of owning property abroad. I was thinking of moving there but I think there is a lot more to it than people first think.

Anyway have had the breakdown of this guys fees as he is only an administrator really so he works for someone else:
official translation of death certificate: 250 euros
certificate of Last Will: 350 euros
Notary fees: 1600 euros
Inheritance tax: 600 euros
register Deeds in Madrid: 450 euros
register fees of the Land Registry: 1800 euros
plusvalia tax: 850 euros
Their fees (his fees): 1750 euros

Hmmmm I think dealing with the middle man he is trying it on.!!!

Re: Inheritance tax Mallorca
 

His prices appear way over the top to me. When my husband died here 6 years ago the notary dealt with everything for me and the total was around 1650, that included land registry, Madrid, inheritance tax etc etc. Full time permanent residents with no other property. He died here so I received International Death Certificates in order to deal with everything here and pensions in the UK so no need for translations.

Hope that this helps a little..

Rosemary

Re: Inheritance tax Mallorca
 

Thanks Rosemary

Yes I think it is way over the top too. I think he is thinking ahhhh Englis people, dont know what they are doing... let me see what I can charge. Probably charge more if non residents because they think they can.
Well I am not that daft just to pay a middle man. We have a little time to sort out anyway but looking at all other options.

thanks for your help.

Re: Inheritance tax Mallorca
 

Hi

Just an update on this.
We have decided to go with the agent that sold the property in the first place as he has many years experience and well he has quoted all inclusively just over 3,000 Euros which just shows how the other guy was trying to rip us off.

Thanks for all your help.

Re: Inheritance tax Mallorca
 

I am prepared to get shredded here, but here goes.
IHT (let's talk about Andalucia where I live, currently 2million euros exemption I believe) is part of either the Autonomous Community rules, or the National rules, which are far more punitive, I think it's something like 16000 euros only which is exempt under 'Madrid ' rules.... huge difference. An inheritor in the UK , who let's say is a Group 1 inherited Son / daughter that gains from an estate in Andalucia has to comply with one of the conditions of the A.C. exemption in that all parties must reside in the EU.

If that cannot be satisfied, it Madrid rules? Unless a separate agreement, the UK leaves the EU next March.

On the face of it, a huge impact after Brexit on thousands of people inheriting ex pat estates in the UK. I cannot see how the A.C. condition can then be met, either way actually.... I.e. an ex pat inheriting a UK estate as well.

Blast away, I am not an expert, it's just my own understanding after personal experience two years ago!

Re: Inheritance tax Mallorca
 

That rule has recently (February 2018) been overturned by the Spanish Supreme Court. It should become law soon.

https://www.spanishsolutions.net/blo...t-uncertainty/