We were wondering has anyone else done this. We have a property here in Spain we are all resident. We were thinking about putting our property into our childrens names to save on inheritance tax in the future. Does anyone know how simple the process is to do this, time scales and the cost. Thank you.

There can be implications if the kids are married and get divorced. The other half can claim half the property which is yours. Take advice.

Yes we have already considered that. I suppose we would have to write some sort of legal contract saying that we could live there until death.

Keep it in your name, pay the tax, Spain is in the shit, the country needs this tax............give a little back.......

Best done on first purchase as their will be cost similar to a sale with all the notary and Cadastral costs. Their may also be gift tax. If you happen to own the propert in a company then it easier and less costly. The other points about the children marrying and divorcing has to be considered but clever lawyers could work round that I am sure. We bought our villa between the five of us ( us and our three children ) with a usufruct for my wife and myself. One son is married and our daughter marries in September so I suppose ther is a slight but growing risk.

My husband is registered self employed and has been for the last eight years and believe me the Spanish government gets more than its fair share of all his income.

Depending on where you live, inheritance tax may not actually be an issue as many regions have very favourable exemptions and allowances.

If you do transfer the ownership then gift tax may be payable which is the same as IHT and transfer tax can be as much as 10%.

Spain has been taken to the ECJ about having different rules for residents and non residents and will almost certainly have to offer the same deals to both very soon and retrospectively.

Before you do anything, check out what the potential liability might be.

Where do you live?

Hi
I have looked into this with my parents property, as I understand it if you transfer to your kids it has to be notarized at a cost, and the kids or you pay the transfer tax. If you die and pass on the property to your wife and if she keeps it for 5 years you are exempt, when she dies, the kids keep it, rent it out or whatever for another 5 years you are exempt from tax. I guess you need to survive in multiples of 5 years!

regards
Al

Hi

I did it when I bought in 2002; my children actually bought the house and I have an usufruct. As far as I am concerned, I will die a pauper and there will be no tax. I did this on advice from Blevins Franks in England - best money I ever spent.

Davexf

No criticism intended whatsoever, just a general comment.
Strange isn't it how people are quick to condemn or criticise the tax arrangements of certain high profile individuals when they take steps to legally minimise their tax liabilities.
Nearer to home however, it's OK of course!

Good point....

When disgraced bankers walk away with multi-million pound payoffs and owners of mega-corporations pay less tax than the average PAYE worker, then you can feel a little empathy with anyone trying to save a bit on their IHT bill.

Always the low-hanging fruit that gets picked first.

If you are liable for IHT then you are not really the lowest hanging fruit, then, as some people dont have ANY assets.

I may be wrong, but I thought there was no minimum threshold for IHT in Spain and that anyone inheriting property had to pay?
That being the case, I would have thought most people would inherit a share of their parents property at some point, and the tax has to be paid before they can take ownership or even sell it to pay the tax.

But I agree, IHT may not be the lowest hanging fruit, PAYE workers are probably the lowest.

It's an extremely complicated system.

At the national level the allowance is only €16k (for close relatives) but at the regional level there are huge variations. In some regions there is effectively no tax at all and in others the threshold varies, for example in Andalucia it is €175k. There are also special rules for the family home.

It is a tax that is slowly being phased out for most people by increasing the thresholds regionally.