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Wills for Ex-Pats in Spain

Wills for Ex-Pats in Spain

Old Jul 29th 2011, 7:15 pm
  #46  
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Default Re: Wills for Ex-Pats in Spain

Originally Posted by Triana
Agree. We've been advised formally (and told informally by many people) that the 5 year loophole worked in the past but that these days it would be difficult to achieve and that the penalties would be steep. As you say, in most cases it would be fraudulent (and probably not difficult to prove as the surviving spouse at some point would probably have to fraudulently submit paperwork (eg annual tax return, albeit it a nil one) on "behalf" of the deceased.
No, you don't do anything fraudulent on behalf of the deceased. Nobody is pretending they didn't die! If the deceased has their own bank account and bills are paid out of it, then just make sure there is enough money in it to cover the bills.

I made a partial declaration of inheritance for a client just 6 months ago, so his widow could sell the car. The paperwork went off to Madrid (where all non-res declarations of inheritance now have to go) without any probs. Came back eventually after I'd chased it, and there haven't been any follow up questions. Her husband died five years ago next October.
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Old Jul 30th 2011, 3:02 pm
  #47  
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Default Re: Wills for Ex-Pats in Spain

Rostra, So, are you saying that in the case where a resident tax-payer dies, you notify the tax ofifice of his death (because otherwise you would have to submit tax returns and pretend he didn"t die) and then just wait until inheritance tax is no longer due?

I suppose in the end it is down to the interpretation of fraudulent - are you saying that waiting 5 years is not fraudulent provided you do not "realise" you have to pay IHT? It seems strange in this day and age that the authorities can accept ignorance of the law when there is so much information available eg internet, books, legal advisers.

I seem to remember another thread on here not so long ago where someone posted about the penalty for not declaring being 3 times the tax due.
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Old Jul 30th 2011, 3:09 pm
  #48  
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Default Re: Wills for Ex-Pats in Spain

Surely IGNORANCE is no excuse?
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Old Jul 30th 2011, 6:36 pm
  #49  
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Default Re: Wills for Ex-Pats in Spain

Originally Posted by Triana
Rostra, So, are you saying that in the case where a resident tax-payer dies, you notify the tax ofifice of his death (because otherwise you would have to submit tax returns and pretend he didn"t die) and then just wait until inheritance tax is no longer due?

I suppose in the end it is down to the interpretation of fraudulent - are you saying that waiting 5 years is not fraudulent provided you do not "realise" you have to pay IHT? It seems strange in this day and age that the authorities can accept ignorance of the law when there is so much information available eg internet, books, legal advisers.

I seem to remember another thread on here not so long ago where someone posted about the penalty for not declaring being 3 times the tax due.
The question of the tax return is easily dealt with by the surviving spouse making a joint return with the deceased spouse, and using the part of the form that allows you to enter the date of death, and therefore only include the income up to the point at which the late tax payer died(and only claim a proportionate amount of tax allowance).

Fines are applied if the declaration is made WITHIN the five year period, but up until now the Notary has always put the phrase 'exempt from inheritance tax' on the deed of sale, if five years or more has passed since the death, since Spanish tax law does not allow for back taxes to be charged more than five years in arrears.

I am about to make a sale for clients in October of a property inherited from a parent. If it no longer works, I'll let you know.


The sale I am talking about is from my clients to a very well respected lawyer in Lanzarote. It was he who suggested that we delay the sale to October (although it was contracted and a deposit paid in February) as at that point we would have passed the five year deadline. The clients ageed the sale themselves - I am just doing the conveyancing under POA as there are 6 heirs.

Watch this space.
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