WILLS AND INHERITANCE
 

If one of a married couple dies and there is no will and no children would the spouse automatically get the other half of the house? Obviously talking about living in Spain here.

Re: WILLS AND INHERITANCE
 

If you die without a will the Spanish inheritance laws will apply.

They are as follows.

Descendants: The decedent's issue and their descendants will inherit in the first place. Either legitimate, illegitimate child or individuals adopted have the same succession rights.

Ascendants: They will inherit when the decedent dies without leaving issue. They will inherit in equal parts.

The spouse will inherit if the decedent has neither issue nor ascendants.

Collateral family: If the decedent had neither descendants, nor ascendants, nor spouse, his brothers and/or sisters will inherit equal parts of the estate.Nephews/nieces will inherit the portion that would have corresponded to the brother/sister deceased (brother/sister of the testator and father/mother of the nephews/nieces who shall inherit)

Cousins will inherit when there exist no one of the individuals above mentioned.

The Spanish Government will inherit when there exist no one of the individuals above mentioned.

Re: WILLS AND INHERITANCE
 

Totally unfair, unreal and unbelievable!!

Re: WILLS AND INHERITANCE
 

Hear Hear

Re: WILLS AND INHERITANCE
 

Blimey , I think by the sounds of that the first thing on the agenda is to make a will :eek:

Re: WILLS AND INHERITANCE
 

But it is the law here, and you have to live by Spanish laws. There are many laws in the UK that are unfair, unreal and unbelievable.

Re: WILLS AND INHERITANCE
 

Thanks for that it is very important then to get my friends to make a will. Another point. Okay what if one of them died whilst in the UK and the surviving spouse didn´t tell the Spanish tax authorities?

Re: WILLS AND INHERITANCE
 

One way the Spanish get round the inheritance tax is not to tell the taxman of the death until 4 years have elapsed. I know of people who have had this advice, in one case from their bank manager, and in the other from a lawyer!

I fear that the system in Spain may have improved recently and that the various government departments may now be talking to each other so whether it would work is debatable.

If the death occured in the UK it would be easier to avoid informing the Spanish authorities but there could be problems selling the property and also, if the ascendents or descendents who should have had a share, get to find out that could be a problem.

The solution is clear - MAKE A WILL.

Re: WILLS AND INHERITANCE
 

If you are part of a couple, and one dies, withdraw a load of cash BEFORE telling the banks, as your accounts, if joint, will be frozen for a while until things are sorted out. But, as Fred says, MAKE A WILL.

Re: WILLS AND INHERITANCE
 

Without going into too much detail as I am far from qualified to do so.
If you have sufficient capital and the correct advice from a good financial advisor who knows the Spanish law. You can legally avoid Spanish /British inheritance tax alltogether, without making a Spanish will, and decide yourself who would benefit in the event of your death.

Re: WILLS AND INHERITANCE
 

You cant just say that and leave it at that! :lol:

Re: WILLS AND INHERITANCE
 

Come on - spill :confused:

Re: WILLS AND INHERITANCE
 

Hi all,
I am married with 2 children from a previous marriage. Both my husband and myself have made spanish wills leaving everything firstly to each other and then to my 2 children. If I die first that would mean my children would then inherit from a step parent which I think would be at a higher rate. Does anyone know any facts or figures on this? We are both residents and my son will shortly be purchasing a holiday home here.. Both children have several properties in the UK which might make a difference I would like to say that this is the best forum I have found and thanks to everyone for all the help.

Re: WILLS AND INHERITANCE
 

If you inherit in Spain there are certain allowances which vary from region to region. These allowances are not normally applicable to non relatives and also the tax rates are double the normal rate.

As has been mentioned in an earlier post, there are many ways to avoid IHT in Spain. Setting up a trust between the family members is a common route. The other option is to transfer the property to the children now and retain the right to use the property during the life of the two of you.

Re: WILLS AND INHERITANCE
 

Hi Fred
What would happen if you are not married!
For example,two Freinds have a house in spain solely owned by one and no morgage,Either one are non resident in spain.
One person Dies and leaves it to the other,what would be the best legal way to reduce the Inheritance tax?
Regards
kevin

Re: WILLS AND INHERITANCE
 

Hi Everyone,

I am new to this forum and very interested in the answer to Kevin's question if anyone has it??

Many thanks :)

Re: WILLS AND INHERITANCE
 

Tricky one Kevin.

If you were resident then the best move would be to form a civil partnership. In Spain it applies to same sex couples and also to mixed sex couples.

This would give the same rights as a married couple so you would have the option to retain the house for 10 years and not pay the tax however this option only applies to residents.

The tax is doubled for non related inheritors so at least that problem would go away if you had a partnership.

The other option is to go down the trust or company owned route where the property is owned by the trust/company and you are shareholders. Have a talk with one of the many companies who advertise these solutions.

Re: WILLS AND INHERITANCE
 

Thanks Fred
You say double the inheritance for non related,what would that be?

I have thought of a couple of options,what if one bought the house before the other dies,what if one takes out a Morgage before,would you get a low value or a high val?
Regards
Kevin

Re: WILLS AND INHERITANCE
 

Kevin, there are 16 different bands for IHT starting at 7.65% going up to 34% on anything over 800k.

In simple terms an inheritance of 120k would pay 15k and an inheritance of 240k would pay 40k and an inheritance of 400k would pay 80k.

Cousins/uncles pay this tax multiplied by 1.6 and non relatives pay twice the amount. It is also increased to 2.2 times if the beneficiary is not related and has personal assets of more than 2m. so the maximum rate of tax is nearly 80% in the extreme case.

There are some allowances before the tax kicks in - everyone gets 16k but depending on the region of Spain it can be much higher.

Either way, as you can see from the figures, it is a tax well worth avoiding!

The upside is that the value of the house used by the taxman is often much lower than the real value. It can be calculated on the basis of the catastral value multiplied by a factor depending on the location - typically 3x the cat value. If you declare a figure in that ballpark it is unlikely to be challenged.

A mortgage clearly reduces the value.

I am not sure I understand what you mean by "buying the house before the other dies". Do you mean an existing house or a new purchase?

If you bought the existing house you would have to do so at the full market value or the difference could be taxed as a gift. Also the money you paid would just become another asset and be taxed unless you spend/hide it and remember that being an official transaction you would have to show where it went.

The various discussions and suggestions so far on this subject do emphasise the need for forward planning to avoid IHT. It is pretty simple to set up the right options before you buy property or other assets in Spain but it is much more difficult to rearrange everything after the event.

Re: WILLS AND INHERITANCE
 

Fred Thank you very much,this has clarified a lot.

The option to me would be to morgage for short term and then pay off,reducing IHT
My problem would be the house has a value of (estate agent )1.2 Mil Euro and that is a lot of tax?

Could there be any other way round?

Regards
Kevin

Re: WILLS AND INHERITANCE
 

The mortgage will only help if it is in place at the time of death of the owner.

As I said, the value for IHT will probably be lower than the 1.2m.

You declare what YOU think it is worth and if it is within the guidelines then you will probably be OK but there is always a chance it might be queried but they will then assess the value and ask for the difference.

Apart from the "Company/Trust" approach I don't know of any other options - although I am sure they will be some.

I suggest you talk to a lawyer.

Re: WILLS AND INHERITANCE
 

Thanks Very Much Fred?
Regards
kevin

Re: WILLS AND INHERITANCE
 

Hi
If you already own this property, and remortgage, thus raising money on it, this will not reduce any IHT as this money will be included in the value of your estate?
lmj

Re: WILLS AND INHERITANCE
 

But not if you put the money in an offshore trust, these are very tax efficient for Spanish taxes and are perfectly legal another is certain types of bonds which are favoured by the Hacienda.

Re: WILLS AND INHERITANCE
 

This whole thing about your husband/wife when one dies terrifies me to death.

How are you supposed to go to the banks & take out an account in your name then transfer money to your new account while you are in a state of shock & grieving over the loss of your loved one before telling the authorities. We have 3 bank accounts here.

What are you supposed to live on, air.

My husband is 14 years older than me & will be 80 next year. We have been married 38 years. But when him/her upstairs calls you you have to go.

We have Spanish & English wills leaving every thing to each other, & we live here permanently.

As for inheritance tax, that's a different story & I don't understand it.

Wendy x

Re: WILLS AND INHERITANCE
 

Hi Wendy Nesbeth,

Kath and I have been married 40 years this year and have had a joint account for 41 years and we had no intention of changing that but when we come over to Spain I have almost decided that we will have separate accounts probably in different banks mine the major one with most deposits going in and hers with say just her state pension paid in each week/month so that if something happened suddenly she could at least afford a ticket to England to be with the children.

It is no wonder the Spanish don't declare the death to the bank until they have emptied the bank account also since wealth tax is calculated on the balances in the last quarter I bet Spaniards have large ammounts of cash at home from Oct - Dec!

Regards,

John.

Re: WILLS AND INHERITANCE
 

The best way for any UK domicliled person to deal with Spanish Property ownership is to transfer the property into a UK limited company , this means that if one partner dies there is nothing to do in Spain no Lawyers no IHT no hassel .the cost is low compared to the savings .time and anguish to the partner

Re: WILLS AND INHERITANCE
 

hi i am new to this site and wondered if any of you could please give me some advice
my mum and her partner moved to spain 4 years ago my mum bought a house solely in her name and also still owns one in england they both have spanish residencia her partner is a lot younger and has never worked either in spain or the uk my mum made it clear she was only with him for company and on her death would be left nothing as all her money came from my dads estate my brother who is 30 also lives in spain
the problem is my mum has a brain tumour and hasnt got long left to live her partner has taken all her bank cards abbey accounts in uk and the cajamar which her pension is paid into and also wants the houses in spain and uk we dont know what to do where do we stand and what lawyer do we need uk or spanish as my mum has left no will any advice would be welcomed

Re: WILLS AND INHERITANCE
 

Sorry to hear of your problem.
I think the best bet is to get a lawyer straight away, cancel all her cards and inform the banks that they are being used illegally.
I think under Spanish law if they are not married then everything goes to the family anyway, but as I say this is a case for a lawyer and not really a website.
Good luck.

Re: WILLS AND INHERITANCE
 

denise1488

Hi I have pm'd you with some info, you will not be able to pm me back as you need to port 3 times before you can. By the way welcome to BE

Re: WILLS AND INHERITANCE
 

thank you both for your advice i dont seem to have any pm i will try and figure it out later as im useless on a pc lol

Re: WILLS AND INHERITANCE
 

I have just sent it, look to the top right hand corner of the scene under Welcome denise1488

Re: WILLS AND INHERITANCE
 

It may take a little while for the system to update and allow you to use them.

Re: WILLS AND INHERITANCE
 

thank you i have just got the pm im flying to spain this wednesday and will give the solictor a call thank you both for your help

Re: WILLS AND INHERITANCE
 

Denise I where abouts in Spain are you going to be?

Re: WILLS AND INHERITANCE
 

If your mother has no will then the property in Spain will automatically go to the children.

It is very important that she does make a will in Spain as the legal process without one is very slow and complicated.

Re: WILLS AND INHERITANCE
 

almeria

Re: WILLS AND INHERITANCE
 

The number I gave you was for Chiclana - Costa de la Luz but if you ring them I am sure they can give what advice you need over the phone. Also Fred is very very good with the advice he gives so be rest assured if Fred says something then it is usually correct.

Re: WILLS AND INHERITANCE
 

the trouble with getting a will written now is my mum is bedridden and doesnt really know what is going on around her she doesnt even know what day it is due to her illness and medication so i dont think it would be possible

Re: WILLS AND INHERITANCE
 

Denise this is a terrible situation and I do feel for you. It happened to a friend and her father re-married and then died within six months and his widow got everything and the children nothing. Can you get a Power of Attorney in Spain?
That would then allow you to deal with her affairs. Good Luck to you.