# A Confession



## Derek H (Dec 7, 2008)

I can get the hump. Sometimes I get a mega 'ump.

I got the latter some 6 months or so ago. When I found out the the Spanish were entitled to take a large share of our worldly's, when me and the sainted Nik, pop our respective clogs. I know neither of us would be in a position to worry, being dead and all. But what we leave was for the kids ( kids ? hopefully they would be in their 50's by then. 90's if I had my way).

So, clasping at straws, I've come up with this wheeze :- If we hand over most of our assets now, when we go to that other place ( I mean dead), we would go with nowt. 
Meanwhile our kids would send us "pocket money" each month out of gratitude. 
That way with our OAP's pensions we would be able to live, in rented accommodation fairly comfortably.

It's what the aristocracy do here to get over death duties. So what's good for them, must be ok for us plebs.

Any thoughts ?

Derek ( and the Sainted Nik, who is hovering over my shoulder, correcting my spelling)
PS. She is the resident spell check, chief cook, n bottle washer.
PPS. Almost forgot, also wife and best friend.


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## jojo (Sep 20, 2007)

TOP TIP: Dont fall out with your kids lol!!!!!

I suspect that there maybe some tax implications, but see what t'others say

Jo xxx


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## Lynn R (Feb 21, 2014)

Derek H said:


> I can get the hump. Sometimes I get a mega 'ump.
> 
> I got the latter some 6 months or so ago. When I found out the the Spanish were entitled to take a large share of our worldly's, when me and the sainted Nik, pop our respective clogs. I know neither of us would be in a position to worry, being dead and all. But what we leave was for the kids ( kids ? hopefully they would be in their 50's by then. 90's if I had my way).
> 
> ...


If you transfer your assets to your children now, whilst you are still tax residents in the UK, then as far as I am aware there are no tax implications PROVIDED you live for 7 years after the transfer.

The possible dangers, and they may or may not happen, is that your children predecease you, you have a huge family falling-out, one or more of them go through an acrimonious divorce and their partner is entitled to half of the assets you have transferred to them, one or more of them gets into serious debt problems and loses some or all of the assets you have transferred to them.


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## jimenato (Nov 21, 2009)

If I were you I would not become resident in Spain. 

If you do decide to give your wealth to your kids, do it before you come over to avoid gift tax.


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## youngagepensioner (May 18, 2009)

I believe that if you 'hand over ' your house, you still have to pay the taxes as though they had bought, and you had sold, at market value, certainly I believe this to be the case in Spain, not sure about UK.


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## 90199 (Mar 21, 2010)

youngagepensioner said:


> I believe that if you 'hand over ' your house, you still have to pay the taxes as though they had bought, and you had sold, at market value, certainly I believe this to be the case in Spain, not sure about UK.


I have just completed a transfer of my share of a property in the U.K. The U.K. solicitor informed me that I needed to get the house valued and I would have to pay tax on the difference in purchase price and present valuation. I didn't like the idea of having to pay tax to give something away, so on my return to the Canary Isles, I consulted the chap I use for financial advice, he consulted with his legal department at his head office.

Result; Because I am domiciled in the Canary Islands I did not need to pay tax on the transfer of the property.

The same financial advisor has invested our savings so that we do not have to pay death duties when one of us kicks his/her clogs.


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## extranjero (Nov 16, 2012)

Derek H - you can't win.
Just holiday in Spain. Avoid the pain!
Taxes are a nightmare, and the rules keep changing( for the worse)
Many would never have become resident here had they known what they were letting themselves in for.


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## extranjero (Nov 16, 2012)

Hepa said:


> I have just completed a transfer of my share of a property in the U.K. The U.K. solicitor informed me that I needed to get the house valued and I would have to pay tax on the difference in purchase price and present valuation. I didn't like the idea of having to pay tax to give something away, so on my return to the Canary Isles, I consulted the chap I use for financial advice, he consulted with his legal department at his head office.
> 
> Result; Because I am domiciled in the Canary Islands I did not need to pay tax on the transfer of the property.
> 
> The same financial advisor has invested our savings so that we do not have to pay death duties when one of us kicks his/her clogs.


That sort of advice doesn't come cheap,even if it saves money in the long term., and the firm you use has high charges.
What is needed is major reform of the inheritance tax rules, something we believed would be happening this year, and to date, has not.


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## 90199 (Mar 21, 2010)

extranjero said:


> That sort of advice doesn't come cheap,even if it saves money in the long term., and the firm you use has high charges.
> What is needed is major reform of the inheritance tax rules, something we believed would be happening this year, and to date, has not.


The advice I was given cost me nothing, I have used financial advisors, since May 1997, I have been pleased with the advice given and, more than pleased with the resulting gains, I have never been presented with or asked to pay any fee. Financial advisors make their money from commissions on the products they sell, not on the clients they advise.


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## extranjero (Nov 16, 2012)

Hepa said:


> The advice I was given cost me nothing, I have used financial advisors, since May 1997, I have been pleased with the advice given and, more than pleased with the resulting gains, I have never been presented with or asked to pay any fee. Financial advisors make their money from commissions on the products they sell, not on the clients they advise.


The advice may be cheap, but then it leads on to buying the financial product, and the commissions are often huge!
Many with assets in the UK such as bonds and investments find the cost of financial restructuring prohibitive, that's why it is best never to become resident in Spain.


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## 90199 (Mar 21, 2010)

extranjero said:


> The advice may be cheap, but then it leads on to buying the financial product, and the commissions are often huge!
> Many with assets in the UK such as bonds and investments find the cost of financial restructuring prohibitive, that's why it is best never to become resident in Spain.



Your world is different to the one I know, and I think I will stick with the professionals advice, rather than listening to the man in the pub or the guy on a forum. By doing this I make money and making money makes me happy


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## extranjero (Nov 16, 2012)

Hepa said:


> Your world is different to the one I know, and I think I will stick with the professionals advice, rather than listening to the man in the pub or the guy on a forum. By doing this I make money and making money makes me happy


When you get to a certain age, it's a bit sad if that what makes you happy.
No pockets in shrouds!


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## 90199 (Mar 21, 2010)

extranjero said:


> When you get to a certain age, it's a bit sad if that what makes you happy.
> No pockets in shrouds!



Then I shall carry on being sad, I made so much last year, that after tax, I was able to give a lump some to each of my children, and do you know none of us were the least bit sad.


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## extranjero (Nov 16, 2012)

Wow! 
There must be gold in them thar hills!


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## kurt85 (May 7, 2013)

extranjero said:


> Wow!
> There must be gold in them thar hills!


Only if you know where to look


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## mrypg9 (Apr 26, 2008)

extranjero said:


> Derek H - you can't win.
> Just holiday in Spain. Avoid the pain!
> Taxes are a nightmare, and the rules keep changing( for the worse)
> Many would never have become resident here had they known what they were letting themselves in for.


Such people must have been very stupid to take such a major step without first thoroughly researching all the implications, don't you think?


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## jimenato (Nov 21, 2009)

mrypg9 said:


> Such people must have been very stupid to take such a major step without first thoroughly researching all the implications, don't you think?


You can't research the implications if the rules change after you commit or if your circumstances change in a completely unforeseeable way.


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## extranjero (Nov 16, 2012)

mrypg9 said:


> Such people must have been very stupid to take such a major step without first thoroughly researching all the implications, don't you think?


Yes of course they should research, in an ideal world, but I bet the majority don't judging by questions on this and other forums
Plus, very conflicting and confusing 
advice is given.
Also there have been many changes, and they are ongoing- what might have suited someone's tax situation years ago may not now.
The timing of what part of the year someone chooses to move to Spain, and the huge implications of this are not widely written about. Even in the well known" Bible" on Spain many buy. for example, they know when the financial year is, but not the implications of being tax resudent for the whole year
I only realised how vital the timing was by reading this forum !


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## mrypg9 (Apr 26, 2008)

jimenato said:


> You can't research the implications if the rules change after you commit or if your circumstances change in a completely unforeseeable way.


True...but surely you take on board the fact that the rules might - indeed most probably will - change?


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## mrypg9 (Apr 26, 2008)

extranjero said:


> Yes of course they should research, in an ideal world, but I bet the majority don't judging by questions on this and other forums
> Plus, very conflicting and confusing
> advice is given.
> Also there have been many changes, and they are ongoing- what might have suited someone's tax situation years ago may not now.
> ...


But nobody has a right, an entitlement, to move to Spain. If as you say the majority don't research and weigh up very carefully the advantages and possible future changes then surely they have no- one to blame but themselves?
But many prefer to blame Spain.


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## brocher (Mar 21, 2011)

Lynn R said:


> If you transfer your assets to your children now, whilst you are still tax residents in the UK, then as far as I am aware there are no tax implications PROVIDED you live for 7 years after the transfer.
> 
> The possible dangers, and they may or may not happen, is that your children predecease you, you have a huge family falling-out, one or more of them go through an acrimonious divorce and their partner is entitled to half of the assets you have transferred to them, one or more of them gets into serious debt problems and loses some or all of the assets you have transferred to them.


The seven year rule may not apply if you continued to BENEFIT as you propose. In addition there are limitations to the amount you can give as gifts- and that's just UK tax!

HM Revenue & Customs: Gifts that are exempt from Inheritance Tax

HM Revenue & Customs: Passing on your home to your children


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## Alcalaina (Aug 6, 2010)

I was reading an article recently which said that the scare stories about inheritance tax were unjustified. 90% of non-resident children inheriting property in Andalucia paid little or no IHT in 2008. It only kicks in if the inheritance is worth more than €175,000, and each child has an additional allowance of €16k . They can also offset funeral and medical expenses.

http://belegal.com/articles/showArticle/spanish-inheritance-tax-spain-iht

I don't know if this is true or out of date or I've misinterpreted it, but it may be that the OP is worrying unnecessarily?

Just avoid Murcia!


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## extranjero (Nov 16, 2012)

mrypg9 said:


> But nobody has a right, an entitlement, to move to Spain. If as you say the majority don't research and weigh up very carefully the advantages and possible future changes then surely they have no- one to blame but themselves?
> But many prefer to blame Spain.


How can they weigh up possible future changes, they could be detrimental or advantageous.


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## extranjero (Nov 16, 2012)

Alcalaina said:


> I was reading an article recently which said that the scare stories about inheritance tax were unjustified. 90% of non-resident children inheriting property in Andalucia paid little or no IHT in 2008. It only kicks in if the inheritance is worth more than €175,000, and each child has an additional allowance of €16k . They can also offset funeral and medical expenses.
> 
> Spanish Inheritance Tax: Advantages of Making a Will in Spain - belegal.com
> 
> ...


The link you gave is for a firm which has a forum on taxation web.
Last year there was a long thread on this forum, Expat forum Spain, about taxation, and a poster asked about whether he had to pay CGT on the profit from selling his house in the UK, having sold it before he moved to Spain before July 2 nd, therefore making him tax resident for the whole year.
The poster then quoted advice from belegal stating that , No, no tax to pay in Spain, tax was only due in the UK, as it was sold in the UK.
This went against everything we had been advised on this and other forums.
Tax WAS due in Spain, so I don' t know how much we can trust this advice.


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## mrypg9 (Apr 26, 2008)

extranjero said:


> How can they weigh up possible future changes, they could be detrimental or advantageous.


Quite. So they have to decide if changes detrimental to them could still make the move affordable. That's what we did before we left the UK for Prague and indeed when we planned to leave Prague for Spain.

We aren't leaving any property or money to my son, he doesn't need it and our chosen lifestyle and income are well within the range of any exchange rate, price or tax rises.
We don't live in a palace because we can't afford to. We don't live in a poky flat because we don't have to...but should a catastrophic fall in income occur, we can still afford the poky flat.

I just don't understand how people do not plan for ALL eventualities when moving. Take paying for funerals for example..do they think they won't die? Some people seem to think they have a right to live in Spain whether they can really afford it or not. Do they expect the Spanish Government to never change its tax rates or the exchange rate never to fluctuate? Do they think Spain should be run for the benefit of British immigrants, as ifit were some kind of colony?

I'm getting tired of immigrants running down Spain because it hasn't accommodated itself to their expectations., corruption, the black economy, crime...these things exist everywhere not only in Spain and they're a hell of a lot worse in some places I've lived in.
The bottom line is that Spain has open borders. No-one can be kept here against their will. If life here is unhappy for you for whatever reason...cut your losses, go.

As some people tell would- be immigrants wanting to come here on a shoestring, willing to 'do anything'...you only have one life.


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## Lynn R (Feb 21, 2014)

extranjero said:


> How can they weigh up possible future changes, they could be detrimental or advantageous.


We can't do that whether we move to Spain or stay put in the UK. Whatever a Government may choose to do in the future (or have forced upon it by matters largely beyond their control) is a complete unknown.


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## Lynn R (Feb 21, 2014)

Alcalaina said:


> I was reading an article recently which said that the scare stories about inheritance tax were unjustified. 90% of non-resident children inheriting property in Andalucia paid little or no IHT in 2008. It only kicks in if the inheritance is worth more than €175,000, and each child has an additional allowance of €16k . They can also offset funeral and medical expenses.
> 
> Spanish Inheritance Tax: Advantages of Making a Will in Spain - belegal.com
> 
> ...


As far as I'm aware, the allowances can't be claimed by non-residents. I think there is a legal challenge under way about this as it is claimed to be discriminatory under European law, but haven't heard anything about its progress for quite a while.

However, if assets located outside of Spain are inherited by beneficiaries who are non-resident, no IHT would be payable on them.


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## Derek H (Dec 7, 2008)

It would seem I've opened a can of worms. Didn't mean to, honest!

As and when I've time, still banging in those 11 hour shifts, I'll go through them individually. Meanwhile thanks one and all.
I think one answer is to die, before we come over. That'll teach 'em. But there would be no fun in that. And, I suspect, an even more mega hump. Although, where I'm likely to end up, I'll be warm.

One thing that does concern me. And I never wanted to happen. Is for people to fall out. A failing not only on this forum, but on forums in general. I don't think there is a right opinion. There are opinions. Life's too short. Besides, I'll get the hump.
We will take some legal advice before we do anything.
Thanks again, one and all.
Derek


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## Justina (Jan 25, 2013)

*Hepa*



Hepa said:


> Your world is different to the one I know, and I think I will stick with the professionals advice, rather than listening to the man in the pub or the guy on a forum. By doing this I make money and making money makes me happy


What makes me truly happy is to be able to walk the streets feeling safe.
I certainly could be happier if I could findthe perfect spot to buy within my financial possibiities. Doubt if it will happen, but meantime I will enjoy the pleasures of living within my income.


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## Derek H (Dec 7, 2008)

Lynn R said:


> If you transfer your assets to your children now, whilst you are still tax residents in the UK, then as far as I am aware there are no tax implications PROVIDED you live for 7 years after the transfer.
> 
> The possible dangers, and they may or may not happen, is that your children predecease you, you have a huge family falling-out, one or more of them go through an acrimonious divorce and their partner is entitled to half of the assets you have transferred to them, one or more of them gets into serious debt problems and loses some or all of the assets you have transferred to them.


Para 1.
This pretty much is my train of thought.

Para 2.
Unfortunately, sh,1,t happens. Life, as we all know, isn't always fair.
Derek


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## Derek H (Dec 7, 2008)

jimenato said:


> If I were you I would not become resident in Spain.
> 
> If you do decide to give your wealth to your kids, do it before you come over to avoid gift tax.


Para 1.
I'd be interested in your train of thought here. As far as I'm aware, if we spend more than 180 days in Spain in total per year, as far as the Spanish gov. is concerned we would be liable to be considered residents.
If I'm wrong, don't hesitate to put me right.
Derek
ps. I won't get the hump.
pps. Last time I'll use that. Maybe.


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## Derek H (Dec 7, 2008)

extranjero said:


> Derek H - you can't win.
> Just holiday in Spain. Avoid the pain!
> Taxes are a nightmare, and the rules keep changing( for the worse)
> Many would never have become resident here had they known what they were letting themselves in for.


Sounds like a plan.
Although I think that some of you guys have lived in Spain so long, you've forgotten what British winters are like.
NB I said some not all.


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## Derek H (Dec 7, 2008)

mrypg9 said:


> But nobody has a right, an entitlement, to move to Spain. If as you say the majority don't research and weigh up very carefully the advantages and possible future changes then surely they have no- one to blame but themselves?
> But many prefer to blame Spain.


Mary, I am trying to cover all potential problems, hopefully then our dotage would be as stress free as possible. I owe her that, believe me. Life with me has never been boring. The woman is a saint.
Derek


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## Derek H (Dec 7, 2008)

brocher said:


> The seven year rule may not apply if you continued to BENEFIT as you propose. In addition there are limitations to the amount you can give as gifts- and that's just UK tax!
> 
> HM Revenue & Customs: Gifts that are exempt from Inheritance Tax
> 
> HM Revenue & Customs: Passing on your home to your children


My homework for tonight.
Thanks, I thought I was in for an early night 
Derek


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## Derek H (Dec 7, 2008)

Alcalaina said:


> I was reading an article recently which said that the scare stories about inheritance tax were unjustified. 90% of non-resident children inheriting property in Andalucia paid little or no IHT in 2008. It only kicks in if the inheritance is worth more than €175,000, and each child has an additional allowance of €16k . They can also offset funeral and medical expenses.
> 
> Spanish Inheritance Tax: Advantages of Making a Will in Spain - belegal.com
> 
> ...


Have you seen UK house prices ? Not much about under £175k. 
No offence meant, non taken, I hope.
Derek


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## Derek H (Dec 7, 2008)

Lynn R said:


> We can't do that whether we move to Spain or stay put in the UK. Whatever a Government may choose to do in the future (or have forced upon it by matters largely beyond their control) is a complete unknown.


My Mum always said," No matter who you vote for, the Government always get in.
Derek


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## Derek H (Dec 7, 2008)

I'm off to bed now, Night all.
Oh no. I still have my homework to do. Thanks a lot, Brocher.
Derek


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## extranjero (Nov 16, 2012)

Derek H said:


> My Mum always said," No matter who you vote for, the Government always get in.
> Derek


On Zoopla we have seen many decent looking houses from 125 k.
Depends where you look
Home Counties are out, but Lincolnshire, parts of Yorkshire have loads to choose from.


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## Derek H (Dec 7, 2008)

extranjero said:


> On Zoopla we have seen many decent looking houses from 125 k.
> Depends where you look
> Home Counties are out, but Lincolnshire, parts of Yorkshire have loads to choose from.


Lincoln is very flat. Yorkshire, hum, no offence, but no thanks.
I'm a London boy in exile in darkest Northamptonshire.
One of my sisters is already convinced we are almost in Scotland.
Besides, I'm going to bed, remember?
Derek


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## extranjero (Nov 16, 2012)

Derek H said:


> Lincoln is very flat. Yorkshire, hum, no offence, but no thanks.
> I'm a London boy in exile in darkest Northamptonshire.
> One of my sisters is already convinced we are almost in Scotland.
> Besides, I'm going to bed, remember?
> Derek


I know darkest Northamptonshire well, and I wouldn't want to live there, either!


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## Derek H (Dec 7, 2008)

Touche!


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## snikpoh (Nov 19, 2007)

Derek H said:


> Para 1.
> I'd be interested in your train of thought here. As far as I'm aware, if we spend more than 180 days in Spain in total per year, as far as the Spanish gov. is concerned we would be liable to be considered residents.
> If I'm wrong, don't hesitate to put me right.
> Derek
> ...




Just to clarify; after 182 days (in a calendar year) you are considered tax resident.


You will already be considered resident after 90 days.


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## maxd (Mar 22, 2009)

There are always ways to avoid IHT, once you have left the UK and mentioned as such in the correct department they consider you gone. You are just a number in their computer. 

If you leave cash and property in your name in the UK then that is probably not the best idea as they will be frozen once you are dead and they will be come as cold and icy as you are until the tax is paid


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## Alcalaina (Aug 6, 2010)

Derek H said:


> Have you seen UK house prices ? Not much about under £175k.
> No offence meant, non taken, I hope.
> Derek


This isn't about UK prices, it's about the value of your assets (property + cash) _based in Spain (_specifically Andalucia, the sum varies between the regions).


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## Derek H (Dec 7, 2008)

Alcalaina said:


> This isn't about UK prices, it's about the value of your assets (property + cash) _based in Spain (_specifically Andalucia, the sum varies between the regions).


Lo siento, I either misread your post or misinterpreted it. It would appear that some tax would be payable. But not anything as much as I feared.
Spanish regions still confuse me a little. You quote Andalucía, so I suppose one of our preferred areas, ie Malaga(ish) would be covered by your example. Would Valencia, around Javia, have a similar tax system ?

I complain long and hard about taxes here. But at least, our betters in Westminster hit us all equally. 

It was late, and I wanted my bed.
Derek


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## Alcalaina (Aug 6, 2010)

Derek H said:


> Lo siento, I either misread your post or misinterpreted it. It would appear that some tax would be payable. But not anything as much as I feared.
> Spanish regions still confuse me a little. You quote Andalucía, so I suppose one of our preferred areas, ie Malaga(ish) would be covered by your example. Would Valencia, around Javia, have a similar tax system ?
> 
> I complain long and hard about taxes here. But at least, our betters in Westminster hit us all equally.
> ...


Yes, Malaga is in the region of Andalucia. Javea is in the Valencia region.

/SNIP/http://valencia.angloinfo.com/information/money/general-taxes/inheritance-tax/


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