linald
Dec 7th 2009, 8:51 am
#1
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Joined: Dec 2009
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linald
I am British and have just moved to Alicante and become a Spanish resident.
I am worried about Inheritance Tax. If either myself or my husband were to die in the next 5 years ( after that we will have been Spanish taxpayers long enough to warrant having a large reduction in this tax ) the remaining partner would be liable to pay tax on half of all assets jointly owned in Spain. Some people have told us that this also applies to UK investments. The rate worked out for us by one party is 25%. The surviving person would not be able to survive if most of our savings went on this tax. Can anyone advise.
I am worried about Inheritance Tax. If either myself or my husband were to die in the next 5 years ( after that we will have been Spanish taxpayers long enough to warrant having a large reduction in this tax ) the remaining partner would be liable to pay tax on half of all assets jointly owned in Spain. Some people have told us that this also applies to UK investments. The rate worked out for us by one party is 25%. The surviving person would not be able to survive if most of our savings went on this tax. Can anyone advise.
Dec 7th 2009, 9:16 am
#2
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Joined: Jul 2006
Location: up the mountain near Guadalest
Posts: 1,389
Re: linald
You need to take independent professional advice.
Dec 7th 2009, 9:40 am
#3
Joined: Jun 2006
Location: Granada Costa
Posts: 10,902
Re: linald
If you live in Valencia then special rules apply and you get 99% relief on IHT if the beneficiary is a spouse or child and has their habitual residence in the Valencian Community at the time of the death. Habitual in this case, as you know, is 5 years.
This rule was introduced on January 1st 2007.
IHT is payable on all assets including overseas assets but if you qualify for the 99% deduction you will probably not pay any tax as you also get personal allowances of €40000 against any tax due.
Even if you did not qualify for the special deduction, to pay a total of 25% tax would mean that the value of the inheritance would have to be in excess of €800,000 as the tax is applied on a sliding scale between about 8% and 34%
IHT rules vary from region to region and Valencia is probably the best place to live for IHT purposes.
This rule was introduced on January 1st 2007.
IHT is payable on all assets including overseas assets but if you qualify for the 99% deduction you will probably not pay any tax as you also get personal allowances of €40000 against any tax due.
Even if you did not qualify for the special deduction, to pay a total of 25% tax would mean that the value of the inheritance would have to be in excess of €800,000 as the tax is applied on a sliding scale between about 8% and 34%
IHT rules vary from region to region and Valencia is probably the best place to live for IHT purposes.
