Five fast Spanish Inheritance Tax facts
- Unlike in Britain, in Spain there is no exemption from Spanish Inheritance Tax
between husband and wife. A tax form must be completed and the taxes paid within
6 months of death.
- The inherited property cannot be sold or used as collateral to secure a loan/mortgage
in order to pay the Spanish Inheritance Tax bill. Both of these two actions would
require a change of ownership from the deceased’s name into the inheritor’s name(s)
to be made to the escritura (Property Deeds) by the Land Registry. This cannot be
carried out whilst there is an outstanding Spanish Inheritance Tax bill associated
with the property.
- Common law partners or spouses and very distant relations/associates come off the
worst. Common law partners or spouses are not recognised in Spanish law and so are
classed as non-relatives. This means that they are not allowed any allowances so
are taxed at the highest rate of Spanish Inheritance Tax (double that of married
partners).
- In Spain it is the heir who is taxed and not the estate.
- Spanish Inheritance Tax will be calculated on the relationship of the heir to the
deceased, which will affect the amount of the inheritance he/she receives.
These are just some of the important exemptions to take into account when planning
for Spanish Inheritance Tax, which applies to each inheritor not to the total estate.
Many British owners of Spanish property are totally unaware of the above facts resulting
in added stress, financial problems and bureaucratic difficulties for loved ones.
By taking our expert Spanish Inheritance Tax advice and acting in advance now, you
can be assured that you and those you care for can rest easy knowing everything is
in place when the time comes.