Inheritance from UK. Users experience please not guidance.
 

Hi, I would like to hear anyone's personal experiences around declaring this in Spain and paying tax. UK citizen dies in UK leaving only possessions and property located in the UK to someone living in Spain. On the CAB forum having searched 'inheritance' there are people who have been advised they do not need to declare it, and others that they do. There is a lot of confusion, and I wish to complain to the EU about it, and try and get CAB to contact the Consulate, as this is really not acceptable. I have been through it and declared to be on the safe side, even though several said 'no' or 'not property' according to the DTA, that there is the tax law of 1987?, but the DTA takes precedence over this on things like fiscal residence. Also, different gestors, accountants who say you 'do' have all different kind of requirements re documentation, and fees differ greatly. Even tax offices have said you 'don't and some 'you do'. I believe re lawyers, accountants etc, if they are not sure, they will say 'do' because it is to their advantage as they will get the work and have nothing to lose. If we (the individual) get it wrong, there is little point saying 'that is what I was told', and will have to pay for the error. Also, unfairness, in the regional variations, if tax is paid, also the fact, if declared, all the translations and legalisations that we have to deal with, and not deductible. Anyway, I know all the facts, so no advice needed, just information about your experiences. I would like to know what you were told. Whether you agree this is appalling. Whether you would be happy to complain with me. I look forward to hearing from you.

Re: Inheritance from UK. Users experience please not guidance.
 

Welcome to the forum
Personally I do not feel you have any basis to complain to the EU about. This is a link to a non official website that explains the situation quite well. https://www.tas-consultoria.com/blog...x-system-work/ The section headed The Autonomous Communities and taxes is the relevant section.
This link, in Spanish gives details of the various impuestos propios each comunidad autónoma charges it inhabitants/businesses. https://www.bankinter.com/blog/finan...tonoma-listado.
In both of the above links some of the figures may be out of date. But they do give a good illustration of just how the tax collection works in Spain.
Only those who live in Spain before the 1 January 2021 can complain to the EU: https://www.gov.uk/guidance/living-in-europe
Good luck with your quest.

Re: Inheritance from UK. Users experience please not guidance.
 

You might check this out: https://www.gov.uk/guidance/inherita...axation-relief
There is no DTA with Spain when it comes to inheritance tax.

Re: Inheritance from UK. Users experience please not guidance.
 

You say you know all the facts although there appears to be some wrong assumptions. First there is no DTA between Spain and UK re; inheritance tax. Two CAB is a totally private website ( it simply uses a similar nomenclature as the UK one). It has nothing to do with UK government and is a business that basically connects you with legal firms. Third there is no separate law of inheritance in Spain . It is the law of succession.

Individual communities are autononous regions regarding some laws- not sure the EU can change that.
Not sure what you feel is appalling? Is is simply a different law in spain from uk.
Hope that helps.

Re: Inheritance from UK. Users experience please not guidance.
 

Ok experience.
Declare everything, that way no matter what happens you have covered your rear end.

The CAB is as has been pointed out is a business, nothing more. Its hiding behind a name that us Brits think is a helpful service. Well it is but at a cost and there are shed loads of errors on the site.
Its not an official body and I would not touch them with a disinfected bargepole..

The rules (laws) here in Spain may not be the same as the UK and if you are a fully legal resident who pays tax here, unless you have a complex financial lifestyle then you should have a NT code from the uk and ONLY pay tax here.
So you abide by Spains tax laws, none of this playing around with a bit here a bit there..
And to be honest the laws are actually not that different, earn money in either country= declare and pay tax. The average Uk person never does SA as they are employed and its taken care of. Those of us who have been self employed etc will know about declaring.
Spain uses a system of SA for anyone with an income not from employment (see same thing really).

If you are still tax resident in the UK then you will pay the Uk tax on the inheritance (if there is one) and then pay Spain the difference if Spains tax laws mean you pay a higher rate of tax. SIMPLE.
And again as has been said, its not inheritance here, its succession. Because the tax in the UK is on the dead persons estate, here its on the poor so and so who gets the money. Good if its a parent, but bad if its a great aunt who left you the money.

Thank the stars you are not from the US, the tax man there follows you around the world..

You have no case to complain, live here follow the rules, dont like it... there are around another 190 other countries you could go to....
I dont like the fact I pay more tax here on my meagre pension than I would in the UK (almost twice, due to the lower tax free amount you can earn) but I do it because the wife wants to live here.

My 2c (pre tax of course)....

Re: Inheritance from UK. Users experience please not guidance.
 

The nationality and location of the deceased is not relevant, nor is the location of the assets. What matters is that the beneficiary is a Spanish resident therefore they are subject to Spanish succession tax, end of.

As others have said, no it's not appalling, it is just a difference in the taxation system and much as you might wish to you cannot impose the British IHT regime on Spain. It is one of those things, like having to pay tax on a pension lump sum which would not be taxable in the UK (which I did as I'd already bee resident here for several years by the time I received it), which you have to accept if you want to live here. I got a lot of bar room lawyer type advice too, saying I should not declare it, which I ignored. Like Barriej, I also pay double the amount of tax on my pension income than I would pay if resident in the UK but I find that overall things even out when I take into account Council tax, lower energy bills and the general cost of things. Wherever you choose to live (and it is a choice we make after all) you have to take the disadvantages as well as the benefits.

Re: Inheritance from UK. Users experience please not guidance.
 

The OP says that they have gone through the process but doesn't tell us what they mean by that as they say the process is confusing. They also say they don't want to discuss the process but whether we wish to petition against it.
From what the OP wrote they might be misinformed as to the correct procedure. As already said the only way to be entirely safe is declare in spain and not assume that because nothing has happened that means everything is okay- if you inherited a house in uk and probate was done and you hear nothing from spain doesn't mean everything is fine. The statute of limits is 4 years but even that can be overuled if you avoided declaring. As Lynn points out if you inherit from a parent then tax is usually zero or very little as the UK tax gets unilateral relief against Spanish tax and most regions are generous towards children. One difference is that if you are inheriting uk assests from a spouse then , whilst in uk no tax is payable, in spain there no unilateral tax relief applies. Also, as said , tax in spain is on the beneficiary not the estate and on the relationship between the beneficiary and deceased- so inheritance from aunts, uncles, brothers and sisters is liable for Spanish tax.

Re: Inheritance from UK. Users experience please not guidance.
 

Strangely "disgusted, Tunbridge Wells" springs to mind :rofl:

Re: Inheritance from UK. Users experience please not guidance.
 

Many laws have been changed due to unfairness... And if you read carefully I also talk about different interpretations of this tax law or Dta...it does exist for inheritance.. it talks about 'other' taxes. Once again I do not need your advice, however helpful you are trying to be.

Re: Inheritance from UK. Users experience please not guidance.
 

Actually it would appear no one knows this law. They think they know. Clearly there can't be 3 different interpretations

Re: Inheritance from UK. Users experience please not guidance.
 

Tax can be high even for a daughter. Depends on region

Re: Inheritance from UK. Users experience please not guidance.
 

people say
There is no DTA with Spain when it comes to inheritance tax.[/QUOTE]

I think that is misguided..it is still in force and mentions 'other'taxes

The dta takes precedence over other laws with things like residence, who is classed as a fiscal resident. According to this I am a British fiscal and maybe Spain too! In which case nationality decides!!!

Also none of these comments people have made are answering my questions. I am not asking for advice. Some rules are clear and others not .

👍🏿

Re: Inheritance from UK. Users experience please not guidance.
 

Please note Spain has been ordered to make changes to 2 of its tax related laws already

Re: Inheritance from UK. Users experience please not guidance.
 

Penpac- I ( and no doubt others) have no idea what you are talking about?
I think you need to be a bit more specific what it is that you want to talk about?

Re: Inheritance from UK. Users experience please not guidance.
 

Are you suggesting that different regions tax differently depending on sex!!!!

Re: Inheritance from UK. Users experience please not guidance.
 

I assume you mean EU ruling that non-residents pay same level of succession tax as residents?

Re: Inheritance from UK. Users experience please not guidance.
 

I think that is misguided..it is still in force and mentions 'other'taxes

The dta takes precedence over other laws with things like residence, who is classed as a fiscal resident. According to this I am a British fiscal and maybe Spain too! In which case nationality decides!!!

Also none of these comments people have made are answering my questions. I am not asking for advice. Some rules are clear and others not .

👍🏿[/QUOTE]

What is still in force?
Which rules are not clear?

Re: Inheritance from UK. Users experience please not guidance.
 

What is it then you want?

Re: Inheritance from UK. Users experience please not guidance.
 

The EU as you say have told Spain to modify certain taxes yes. These are the taxes that the EU has some control over. I don't think that the EU has the control over Spanish taxes on succession to enforce them to have a blanket rate over all Spain's autonomous regions. For instance automomous regions set varying rates for annual car tax that's up to Spain and it's regions. The EU can't force all eu countries to have one type of rate for inheritance tax because individual countries tax it differently some as succession as in Spain some on the inheritance of the estate from a deceased as in the UK. Spain has made concessions already, in that with wills for residents who aren't citizens with signed wills can state they want say British inheritance rules to apply rather than Spanish succession rules, the will must expressly state this. This link explains difference between say UK and Spanish inheritance rules. I have searched on line and everything I read states that the UK double tax treaty does not apply re inheritance tax in Spain . I have to agree with Ronnyone I don't really know what you want for an answer as I was lost with your opening post. You are clearly angry over something to do with this tax but don't really say what? Are you just looking for others to join you petitioning the EU to force Spain to change its inheritance tax? You say you don't want advise yet argue against those that present information re double tax . I have provided a link that explains succession tax and difference to inheritance tax . I have no personal experience of this tax to be fair.
https://www.blacktowerfm.com/news/sp...%20or%20other.

Re: Inheritance from UK. Users experience please not guidance.
 

I think that is misguided..it is still in force and mentions 'other'taxes

The dta takes precedence over other laws with things like residence, who is classed as a fiscal resident. According to this I am a British fiscal and maybe Spain too! In which case nationality decides!!!

Also none of these comments people have made are answering my questions. I am not asking for advice. Some rules are clear and others not .

👍🏿[/QUOTE]


I answered and it was clear.

Just declare everything everywhere, stop trying to look for a loop hole or a way to not pay....

As said, I pay twice the amount of tax here than I would in the UK and if I was still taxed in the Uk (Im not as Ive put in a tax return here and got the fiscal form to say Spain is the only place I want to be taxed) then BOTH countries in this instance would take money off me as Spain has a higher tax burden that the UK.
Id pay Uk tax and then you would claim that tax paid off the tax demand here... Its so simple I think my goldfish could understand (well maybe not with his 3 second memory).....

That in a nutshell is ALL the DTA is.

When my dad finally snuffs it I will have half of his house to sell. In the UK if there is tax to pay he (or the estate) will have to pay it. Then if there is tax to pay here in Spain I will as I am the beneficiary..
The DTA has no standing here as the two types of tax are different. Dead people here dont owe taxes (they do in the UK).

I cant see what your issue is to be honest..

Re: Inheritance from UK. Users experience please not guidance.
 

Obviously nothing short of a "oo yes isn't it awful, shouldn't be allowed" response will satisfy the OP so we are all wasting our time.

Re: Inheritance from UK. Users experience please not guidance.
 

I am sorry you feel no one has answered your question. Your opening post only has one question mark.
What caught my attention in your post was.
In response I gave you some links about the system of taxation here in Spain.
I appreciate that the UK is no longer in the EU. But when it was and until now do you realise there are differing tax regimes, in the various countries that make up the UK? That is the same as here in Spain. I cannot recall anyone who went to the EU (when it was possible) to complain about that.

Re: Inheritance from UK. Users experience please not guidance.
 

This situation for me arose in 2020 with an inheritance from my aunt. Unfortunately what I did not realise is that the tax authorities must be informed of the inheritance within six months from the date of death even if the money has not been received. The notification must be renewed every six months until the money is received. The tax rates depend on the degree of relationship between the deceased and the beneficiary, in my case it was a third degree of separation so not much in the way of mitigating the tax payable. In Spain the beneficiary is taxed not the estate.

Had I sought advice rather than wait for the funds to arrive and then enquire about how to declare this I would have saved a bit of money by not paying a late notification fine. I engaged a lawyer to sort this situation out, they calculated the IHT payable and liaised with the Tributaria and subsequently transferred the funds to resolve the matter.

I was told that if the inheritance was not declared then tax would not be payable after a period of time, 5 years I think had elapsed. I am too old to be trying this sort of thing on so for peace of mind I paid what was owed. It was a bit painful but it is the law and I can sleep peacefully at night.

Re: Inheritance from UK. Users experience please not guidance.
 

They were looking for personal experience and possibly someone to join in with the fruitless complaint. I have no experience with this either but I'll add something just for fun.

When the awful day arrives I'll try to complete the correct form with guidance here:
Instrucciones_mod650_en_gb.pdf (agenciatributaria.es)
Then accept that there's a very good reason why I pay an accountant a few Euros per month and hand it over to him. What I won't do is ask a bloke in the pub about the law, start looking for a new car and book a holiday before the liabilities are taken care of.

The Agencia Tributaria portal is actually very user friendly but I don't trust myself with these matters so it's easier to let a professional deal with it.

Re: Inheritance from UK. Users experience please not guidance.
 

I have had experience of this about 10 years ago but it involved my wife inheriting and due to a lack of a will we just waited it out 4 years - so not much of an experience. Recently I have had to get information about it due to being made a POA. I am pretty much up to date on it vis a vis Valencia. I can assure people that if you are inheriting a fairly sizeable amount from uk you will need a Spanish lawyer and should expect a bill of around 1000-2000 €. The paperwork involved is complex as is the use of unilateral relief which is a separate process.

Re: Inheritance from UK. Users experience please not guidance.
 

That is interesting. But how can you put any value on anything until you know what you may inherit?
Then there is a situation as shown on Heir Hunters, the television programme, you receive a contact about a distant relative months or years after a death?



Whilst we are on the subject of inheritance.
I do hope that all members who are resident in Spain have made a Spanish will. It makes things so much easier. However, there may still be complications. As we found out after a death of a friend last year who was Dutch.:thumbdown:

Re: Inheritance from UK. Users experience please not guidance.
 

We may (will) be in a position at some point to inherit a small property owned by a distant relative in the UK.
I have already contacted the relative and the future executors of her will and have asked for an approximate value of the place to be sent to me now.
Once I have this I will let my solicitor and the accountant have this to work out how much approx I would be liable for here (wont be any tax due in the Uk as its a small cottage).
If it turns out I will have to pay a sizeable sum then I will revoke my claim and ask for it to be passed to my children, one of whom is still a UK resident..

We will have a similar situation with the wife's father as he signed everything over to his second wife to stop his son claiming anything. If we are in the will here I expect a huge bill as they are not related except through her dads remarriage.
We will refuse the villa and it can rot as his second wife has no family...

Ive already done the same with my Dad's house and the tax to pay here will be zero...(nor in the UK)
Id suggest others do the same as it saves a little time and the expense (€100 in my case) was worth it.

Dont have a Spanish (or Uk will) as yet as we only own the flat here. My pension in the UK automatically becomes a trust for the kids as a pension and the wife gets her % as a pension...

Re: Inheritance from UK. Users experience please not guidance.
 

This is one of those that could only be tested case by case, and should not be considered an absolute rule. You are right that cases prescribe under the statute of limitations at either 4 or 5 years in different parts of tax law. However, the gotcha could be that if you knowingly did not declare something for five years, then even in the last year, you have still committed a fraud which you have renewed each year in your tax declaration because you always have a liability to correct previous errors. The four or five years could be argued to keep on renewing. Whether Hacienda would find it worthwhile to go to court would depend on the case. Some of the recent celebrity cases have had major problems using the statute of limitations to prescribe debts, but I guess most of us are not in that income bracket.........

I agree with Barriej declare, pay, live in peace.

Re: Inheritance from UK. Users experience please not guidance.
 

As I didn’t notify the authorities I cannot say for sure what has to be initially declared. I suspect it’s more of a notification and this is kept on file. My lawyer had to submit a copy of the death certificate, the will and the final estate value as calculated by my aunts lawyer all translated.