# IHT / taxes



## harryw (Jun 26, 2011)

We had fairly settled on buying a place in Alicante and spending most of the year in Spain when i did further reading on the inheritance tax and new rules on reporting all foreign bank accounts. My understanding is that if I die before my wife, she will have to pay an inheritance tax for my half of the property. In addition, my cash and investments are held for my wife and children in a living trust in the US. These assets would also be subject to inheritance tax 

Is this correct? If so, do other forum members have concerns about losing their life savings to Spanish taxes?


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## snikpoh (Nov 19, 2007)

harryw said:


> We had fairly settled on buying a place in Alicante and spending most of the year in Spain when i did further reading on the inheritance tax and new rules on reporting all foreign bank accounts. My understanding is that if I die before my wife, she will have to pay an inheritance tax for my half of the property. In addition, my cash and investments are held for my wife and children in a living trust in the US. These assets would also be subject to inheritance tax
> 
> Is this correct? If so, do other forum members have concerns about losing their life savings to Spanish taxes?


Alicante being in the Valencia Generalidat (sp?) has very generous succession tax rates between (resident) spouses and/or children. However, you do need to take advice. 

For example, if you plan on leaving it all to your wife (and vice-verca), then you need to be aware of the laws in Spain about leaving most to your children. They, as non-residents (or are they?) may not benefit from the low tax rates here.


We are a family of 5 (wife and three children). As we are all resident here, the tax rate would be about 1% less some more allowances - so, in real terms, very little.


Again, the best advice I could give is to see someone who is knowledgeable about both Spanish succession tax and UK/US inheritance tax.


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## harryw (Jun 26, 2011)

Snikpoh
Thank you for the information, very much appreciated. I am going to try to find a tax expert who can help me to better understand my obligations
Harry


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## xabiaxica (Jun 23, 2009)

harryw said:


> Snikpoh
> Thank you for the information, very much appreciated. I am going to try to find a tax expert who can help me to better understand my obligations
> Harry


off on a slight tangent - your flags suggest that you're a US citizen

if that's the case then under current rules you can only stay in Spain for up to 90 days at a time unless you have managed to secure a resident visa - I guess you've looked into that though ?


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## harryw (Jun 26, 2011)

Not worried about the resident visa, i have looked into that. My concern is the inheritance tax on assets outside of Spain


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## xabiaxica (Jun 23, 2009)

harryw said:


> Not worried about the resident visa, i have looked into that. My concern is the inheritance tax on assets outside of Spain


fairynuff 


I just thought I'd mention it - you'd be surpised how many non-EU posters we get here who are genuinely shocked that they can't just jump on a plane & move here - even EU citizens can't do that now


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## harryw (Jun 26, 2011)

No problem. The inheritance tax and requirement to disclose all bank accounts, etc. has me concerned to the point that I am considering Portugal. Sad, because we were really set on Denia


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## snikpoh (Nov 19, 2007)

harryw said:


> No problem. The inheritance tax and requirement to disclose all bank accounts, etc. has me concerned to the point that I am considering Portugal. Sad, because we were really set on Denia


I suspect that you'll find it's pretty much the same there as well!


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## harryw (Jun 26, 2011)

From what i have read, and this needs more research, inheritance tax obligations will fall under the laws of the country in which a person was born


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## snikpoh (Nov 19, 2007)

harryw said:


> From what i have read, and this needs more research, inheritance tax obligations will fall under the laws of the country in which a person was born


Hmmmm - NO!

I think you need to take advice - soonest.

There is a separate tax in Spain called "succession Tax" (simply translated). It is a different and separate tax to IHT. 

However, if you have paid IHT in, say, UK, then this can be offset against Spanish Succession Tax.


I know this doesn't apply as I believe you are American but, the UK has very strict laws on domicility and therefore IHT. As an English person, it will be very hard for me (and most others like me) to avoid paying IHT as well as Spanish Succession Tax.


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## harryw (Jun 26, 2011)

Thanks. As you can see, inheritance tax, etc. is baffling to me. I covered the US issue by setting up a living trust. When i get back to Thailand, i am going to see if the Spanish embassy can refer me to someone there, otherwise I shall have to try the internet. Contract in Thailand finishes at the end of this year, so we have a little time. Really hope that i can work all of this out


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