We’ve recently bought our house and have been advised that we need a Spanish Will. However, what is the position with regard to inheritance tax?
We would definitely advise you to make a Spanish Will as otherwise getting an Irish or British Will recognised in Spain will only incur expense, frustration and delays to your beneficiaries, as they would almost certainly need to get the death certificate, Will and other paperwork officially translated in Spain.
There’s a deadline of 6 months from the time of the death to file inheritance tax and if you have not made a Spanish Will, this is likely to delay the process significantly, especially as a foreign Grant of Probate generally takes some time.
“What do we do about inheritance tax?” is a question which we are asked fairly frequently and the problem is that the situation can change significantly from now to when you actually die, which hopefully will be many years away!
All we can do is give you a brief picture of the situation currently in our area, the Valencia region, as each area independently dictates their tax and we must stress that this can change this year, next year or at any time in the future.
Spanish Residents are liable to inheritance tax on receipt of an inheritance or gift wherever in the world it is situated.
Non-residents are liable to inheritance tax on receipt of a gift or inheritance that is situated in Spain.
Inheritance tax is paid by the individual receiving, not the estate.
Generally for inheritance tax, depending on the relationship between the deceased and the inheritor, there is a sliding scale of tax allowances. There are four kinship groups.
The worst Spanish inheritance tax cases are mostly related to the transfer of large estates or assets bequeathed to distant relatives or non-family members (common-law partners too). These are the cases that may need some type of planning in advance and advice, but we should advise that very few cases justify the cost of setting up corporate structures.
If you would like any advice on making a Will please contact firstname.lastname@example.org.