# Inheritance tax



## songbird58 (Jul 4, 2014)

Hi there,

I am an ex-pat who has lived and worked in Spain for the last 30 years. My parents live in England and have reached a ripe old age. My question is what inheritance tax would I be liable for either in England or Spain or both when my parents pass away.

Thanks,

Songbird58


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## BBCWatcher (Dec 28, 2012)

What is the approximate value of their estate, and are you even an heir? If you are an heir, are you the sole heir, or would you receive a percentage of the estate?

You say you "lived and worked" in Spain (past tense). Do you intend to be living in Spain if/when your parents predecease you?


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## songbird58 (Jul 4, 2014)

BBCWatcher said:


> What is the approximate value of their estate, and are you even an heir? If you are an heir, are you the sole heir, or would you receive a percentage of the estate?
> 
> You say you "lived and worked" in Spain (past tense). Do you intend to be living in Spain if/when your parents predecease you?


I don't know the approximate value as although my parents have money they are burning it up fast. Yes I am an heir along with two sisters. Sorry I live and work in Spain (present tense) I am domiciled here. In fact I have spanish nationality.

Thanks


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## Bevdeforges (Nov 16, 2007)

Generally, the inheritance tax is based on the country in which the decedent was resident at the time of their death and the relationship between the decedent and the heir. While there are some death taxes assessed against the heir, most inheritance taxes are taken from the estate of the deceased before the assets are distributed.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

FYI, the U.K. estate tax is zero on estates with a value of £325,000 or less. However, Spain has an inheritance tax called ISD, and the tax is levied on recipients of estates. Since they are different taxes there does not seem to be any relief. That is, you could receive a portion of your parents' estate that's already been taxed in the U.K. (on the value over the threshold) before you receive it, then you would have to pay Spanish ISD on the portion you receive, as I understand it.

However, if you're going to inherit an estate less than £325,000 in value, there's no U.K. estate tax, and you're left only with the Spanish ISD -- no double taxation. Oddly enough, ISD thresholds vary depending on where you live within Spain, so living in the "right" place within Spain is one way to reduce your ISD. Of course leaving Spain means you aren't subject to Spanish taxes on your non-Spanish source income including foreign inheritances.

I'm assuming your parents don't have any assets in Spain. It gets a little more complicated if they do.

A possible technique to reduce or eliminate your future ISD tax liability that may work in certain instances is for your parents to update their wills such that you will only inherit up to the ISD tax-free limit (if/as applicable). Any excess of your portion of the estate would instead be paid to another beneficiary -- your child or children, in particular, and if they are living outside Spain or up to the ISD tax-free limit if living in Spain. In other words, if there are people you care about who you'd like to see receive a portion of your portion of the future estate, your parents can make such arrangements in advance if they're willing.

There are more complex estate/inheritance planning approaches that may apply.


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## Bevdeforges (Nov 16, 2007)

You may want to ask over on the Spanish section of the forum. I suspect they may tell you to talk to a notaire (or notario or whatever they're called in Spain) who could at least explain the Spanish side of the obligation to you. There may even be some way to deal with the "double taxation" aspect that you could set up on your own from Spain.
Cheers,
Bev


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## nikkisizer (Aug 20, 2011)

songbird58 said:


> I don't know the approximate value as although my parents have money they are burning it up fast


Hello songbird58,

If they are burning it up fast as you say then you may not have anything to worry about inheritance tax wise if they have enjoyed their fortune and spent it all before the time comes!

Just a thought


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## songbird58 (Jul 4, 2014)

Bevdeforges said:


> You may want to ask over on the Spanish section of the forum. I suspect they may tell you to talk to a notaire (or notario or whatever they're called in Spain) who could at least explain the Spanish side of the obligation to you. There may even be some way to deal with the "double taxation" aspect that you could set up on your own from Spain.
> Cheers,
> Bev



Good idea. I may try the Spanish Consulate too. Thanks for all your advice


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## songbird58 (Jul 4, 2014)

Thank-you so much. All this information is really useful and I will approach my parents on the possibility of updating their wills in order to benefit grandchildren.


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