# Inheritance/Succession tax



## Derek H (Dec 7, 2008)

Yes, I know this has been done to death, and forum readers will be saying, "Oh, not again.
Yes, I know I'm thick as a brick. I need to know if I've understood this correctly.

On the demise of a parent / spouse, in Andalucía a beneficiary would not pay tax on the first 175,000 euro of their share of the inheritance, as long as the total of the wealth is below 400,000 euro.?

We do not plan to buy in Spain, although, never say never. And will use the funds raised from the rental of our UK property to pay our Spanish rent.

Our UK assets come nowhere near 400,000 Euro. 

(Fiko hwell Derek


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## Rabbitcat (Aug 31, 2014)

What is the law re inheriting property- does a house in joint names -hubby/ wife ( no kids) automatically go to surviving partner ? Thanks


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## extranjero (Nov 16, 2012)

Rabbitcat said:


> What is the law re inheriting property- does a house in joint names -hubby/ wife ( no kids) automatically go to surviving partner ? Thanks


Sadly no, you'll have to do some research on IHT. Loads of info - just Google it.
Unlike the UK , Spouses pay IHT on the deceased's assets.
Luckily for you, your region has generous allowances, unlike some which don't have any.


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## Derek H (Dec 7, 2008)

Getting a bit side tracked perhaps.
I googled, Succession Tax Andalucía, and came up with a post by, what I thought to be a firm of solicitors.
I unsure if I'm allowed to give names although they have the initials B,F. Am I B(eing) Frank(s).

I quote.
" It gets even better, as of June 2008 no tax is payable at all, provided the recipient is a spouse or direct line descendant and the taxable value of the inheritance received is no more than 175000e per beneficiary and the wealth of the recipient is no more than 402,678e" 

this is what I would like to be confirmed or otherwise

Derek


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## Lynn R (Feb 21, 2014)

Derek H said:


> Getting a bit side tracked perhaps.
> I googled, Succession Tax Andalucía, and came up with a post by, what I thought to be a firm of solicitors.
> I unsure if I'm allowed to give names although they have the initials B,F. Am I B(eing) Frank(s).
> 
> ...


I believe this is so. We have a friend whose wife died a couple of years ago, and he paid no inheritance tax at all.

For more distant relatives, of course, it's a different story. Another friend died just over 3 years ago and his sister, his closest relative, who inherited both his Spanish and UK assets did have to pay quite a bit, about 25% of what the probable market price of the house would have been (and as you probably know she had to pay the tax before his house could be transferred into her name, so she would have been unable to sell it to pay the tax). Actually she has decided to keep it as a holiday home anyway.


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## Derek H (Dec 7, 2008)

Thanks Lynn. At the moment we have three close relatives, as described by Spanish law, a son, a daughter and a granddaughter. So 3 x 175k euro = 525k euro or £420k . That would be more than the pittance we expect to leave.
I'm not trying to evade or cheat anyone. Just want to know the facts. If my kids will have to pay tax on the first euro they inherit then I'll have to make other plans. I could give them a large percentage of the cash before I/we become Spanish residents. Enough for the deposit on a house for example. I doubt if hat we have to leave would be much more than that.

It's not a case of," If I can't take it with me, I ain't gonna go." 
You can avoid, not evade tax. Death ? You can do neither.

Derek


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## 90199 (Mar 21, 2010)

I'm drinking my assets…………………….


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## Derek H (Dec 7, 2008)

Hepa said:


> I'm drinking my assets…………………….


Bob,
Have one, no, two for me.

Derek

PS.
Sunday, after sunset, is probably not the best time to ask a serious question. I was at work yesterday, therefore, today is technically, my Saturday 
Equally, not a good time after sunset, ecetera.


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## Lynn R (Feb 21, 2014)

Derek H said:


> Thanks Lynn. At the moment we have three close relatives, as described by Spanish law, a son, a daughter and a granddaughter. So 3 x 175k euro = 525k euro or £420k . That would be more than the pittance we expect to leave.
> I'm not trying to evade or cheat anyone. Just want to know the facts. If my kids will have to pay tax on the first euro they inherit then I'll have to make other plans. I could give them a large percentage of the cash before I/we become Spanish residents. Enough for the deposit on a house for example. I doubt if hat we have to leave would be much more than that.
> 
> It's not a case of," If I can't take it with me, I ain't gonna go."
> ...


Derek, one other thing to bear in mind is that if your estate is inherited by beneficiares who are not resident in Spain, then Spanish inheritance tax is only due on those assets which are located in Spain. Therefore, if you envisage your estate going eventually to children and grandchildren, then apart from any property and a bank account you have in Spain, you would be well advised to keep any other savings\investments elsewhere - although until your unfortunate demise (which as you say none of us can avoid) you would have to declare any income received from them on your Spanish tax returns and submit a Modelo 720 return detailing your overseas assets if they amount to €50,000 or more in any one asset class.

Any assets you have which are located in the UK are dealt with under a UK Grant of Probate. In the case I referred to earlier, our friend's sister was able to get this done quite quickly (it's quite a straightforward procedure, no need to use a solicitor, I did it myself for my late father's estate) and sell his UK house, so having to find the cash to pay the Spanish inheritance tax on his house here wasn't such a problem.


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## Derek H (Dec 7, 2008)

Lynn R said:


> Derek, one other thing to bear in mind is that if your estate is inherited by beneficiares who are not resident in Spain, then Spanish inheritance tax is only due on those assets which are located in Spain. Therefore, if you envisage your estate going eventually to children and grandchildren, then apart from any property and a bank account you have in Spain, you would be well advised to keep any other savings\investments elsewhere - although until your unfortunate demise (which as you say none of us can avoid) you would have to declare any income received from them on your Spanish tax returns and submit a Modelo 720 return detailing your overseas assets if they amount to €50,000 or more in any one asset class.
> 
> Any assets you have which are located in the UK are dealt with under a UK Grant of Probate. In the case I referred to earlier, our friend's sister was able to get this done quite quickly (it's quite a straightforward procedure, no need to use a solicitor, I did it myself for my late father's estate) and sell his UK house, so having to find the cash to pay the Spanish inheritance tax on his house here wasn't such a problem.


If what you say is correct, and given while sober (see above re. Hepa ), I thank you.
Also I reckon I owe you one. Maybe we can get together next time we are in Torremolinos. 
Derek and Nikki


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## larryzx (Jul 2, 2014)

First time I have heard the allowance is 175,000€ per person,.

At a presentation on tax last week by Gestores Administrativa (an umbrella group for gestors) they said it was 175,000€ in total. 

I asked why it was that when several lawyers/gestors/accountants were asked the same question there was likely to be several different answers, all of which were likely to be incorrect. There was of course no substantive answer given, and a gestor I have known for years, who was sitting in the hall, left.

A few days before the meeting a friend, who was seeking advice of IHT liabilities for himself and his wife, was told by an accountant that if the assets exceeded 175,000€ tax was due on the whole amount.

I tend to accept I have chosen to live in Spain so I should accept it warts and all, but there are times when I wish the same question would result in the one correct answer no matter how many experts one asks.


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## Derek H (Dec 7, 2008)

I would post a link to the piece I read, if only I knew how. Thankfully, you can still drive a truck with limited IT skills. Probably not for much longer. Still, I'll be finished by then.

Maybe someone, far brighter than me, will pick up on the clues I've left and post a link to the Blevin Franks site. Oh bu***r, I've said it now.

As usual, we will sit here for ages, waiting for an expert to post. And like buses, three will pop up together.

Cheers All,

Derek


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## extranjero (Nov 16, 2012)

larryzx said:


> First time I have heard the allowance is 175,000€ per person,.
> 
> At a presentation on tax last week by Gestores Administrativa (an umbrella group for gestors) they said it was 175,000€ in total.
> 
> ...


I thought it was on the person, as opposed to the UK where it is on the estate, and contrary to what some have been told , if the couple are resident in Spain, IHT is payable on the WORLD WIDE assets of the deceased, not just on assets in Spain.
That's where the sting of the assets 720 comes in, there is a handy checklist for the Spanish taxman to peruse, whereas in the past assets overseas were often not taken into account for the calculation of IHT.( only if it has actually been submitted, of course, )It might explain what so few expats submitted it!


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## snikpoh (Nov 19, 2007)

extranjero said:


> I thought it was on the person, as opposed to the UK where it is on the estate, and contrary to what some have been told , if the couple are resident in Spain, IHT is payable on the WORLD WIDE assets of the deceased, not just on assets in Spain.
> That's where the sting of the assets 720 comes in, there is a handy checklist for the Spanish taxman to peruse, whereas in the past assets overseas were often not taken into account for the calculation of IHT.( only if it has actually been submitted, of course, )It might explain what so few expats submitted it!



And, having broken the law once (not declared income), proceeded to break it again!


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## Lynn R (Feb 21, 2014)

extranjero said:


> I thought it was on the person, as opposed to the UK where it is on the estate, and contrary to what some have been told , if the couple are resident in Spain, IHT is payable on the WORLD WIDE assets of the deceased, not just on assets in Spain.
> That's where the sting of the assets 720 comes in, there is a handy checklist for the Spanish taxman to peruse, whereas in the past assets overseas were often not taken into account for the calculation of IHT.( only if it has actually been submitted, of course, )It might explain what so few expats submitted it!


If a couple are both tax resident in Spain and leave everything to the surviving spouse (or another relative who is resident in Spain), then yes, Spanish IHT is payable on the world wide assets of the deceased.

However, what I said earlier, just to be clear, that if assets held in the UK by a person who was tax resident in Spain are left to a relative who is not a Spanish tax resident (such as a child or grandchild who is UK resident), then those assets are not subject to Spanish IHT - they would be subject to UK IHT if they were over the threshold, however. Non-resident beneficiaries would still have to pay Spanish IHT on any assets the deceased had in Spain, eg a property and\or a bank account.

Care should be taken to ensure that you have both a UK will which stipulates that it relates to UK assets, and a Spanish will which stipulates that it relates to Spanish assets (and contains the clause about disposing of your assets according to the law of your country of birth, rather than Spanish succession law). The will should not state that it revokes all earlier wills, either, from what I have read, as that can cause confusion.


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## larryzx (Jul 2, 2014)

Just in passing.

Whilst I too through worldwide assets were subject to Spanish Succession Tax, until (rightly or wrongly) a gestor told me differently, it would seem difficult to collect if say the asset is outside Spain and the person inheriting is say in UK. How could Hacienda force that person to pay anything? Of course if the asset is in Spain they can seize it.


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## extranjero (Nov 16, 2012)

Your Gestor told you Wrongly, a fact I 'm sure you are aware of now. I am surprised you did nit realise this after many years in Spain.Of course it would be good if assets outside Spain were not taken into account if the survivor lives in Spain, and people got away with just paying the IHT on assets in Spain for many years. Not so, now, though some may try to foo the Hacienda.
I'm not clear what point you are making, in the latter part of your post.
If the person inheriting lives in the UK, and the asset is in the UK , then there is no problem as they would only pay tax if the assets were in Spain


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## mrypg9 (Apr 26, 2008)

Derek, my partner and I have hit on the ideal worry-free solution. We are unrepentant SKINs(Spending Kids Inheritance Now).
This is for two reasons: one because we don't believe in inherited wealth, we both made our own way in life in business (she) and professionally (me) each starting with nothing and secondly my son and his wife are better off than we've ever been and his wife's parents are old and loaded.

When I told my son of our intentions he nodded in agreement but after a moment's reflection asked 'But what will you do if your money runs out sooner than you expected?'
'Arrive on your doorstep with our suitcases, son', I replied.
He went a bit pale but said no more.

So we hopefully will have zero worries about IHT etc although we have both made wills lest we be mown down by a herd of wild goats or something.

We did rent our house in the UK but after six months decided that it just wasn't worth it, what with the tax implications, management fees, repairs and maintenance and the risk of tenants from hell. We had owned rental properties before and I can't say it's something I'd recommend unless you have an enormous property portfolio.


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## mrypg9 (Apr 26, 2008)

extranjero said:


> .Of course it would be good if assets outside Spain were not taken into account if the survivor lives in Spain, and people got away with just paying the IHT on assets in Spain for many years.* Not so, now, though some may try to fool the Hacienda.*


But it's not 'fooling', is it....it's actually deliberate tax evasion, it's a crime and deserves punishment.


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## Dave and Anne Galicia (Nov 15, 2008)

I have a UK property that under my UK will is left to my two children both of whom are UK tax residents. The property is currently rented and I pay Spanish tax on the rental income. The UK property has been declared on Modelo 720. Therefore on my death no Spanish Succession tax would be due on the UK property. No problems - apart from my death!
If if I were to modify my will and leave the UK property in trust to my children with the income to be paid to my wife who is Spanish tax resident until her death would this cause any problems?


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## extranjero (Nov 16, 2012)

Your wife would pay income tax on it


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## Madliz (Feb 4, 2011)

mrypg9 said:


> Derek, my partner and I have hit on the ideal worry-free solution. We are unrepentant SKINs(Spending Kids Inheritance Now).
> This is for two reasons: one because we don't believe in inherited wealth, we both made our own way in life in business (she) and professionally (me) each starting with nothing and secondly my son and his wife are better off than we've ever been and his wife's parents are old and loaded.
> 
> When I told my son of our intentions he nodded in agreement but after a moment's reflection asked 'But what will you do if your money runs out sooner than you expected?'
> ...


I always thought it was SKIers for spending the kids' inheritance, but SKIns does seem to have more attitude. 
Maybe you'd consider yourselves WOOFs, too, not only for your love of dogs but as Well Off Older Folk. Possibly even GOFERs - Genial Old Farts Enjoying Retirement? :eyebrows:


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## mrypg9 (Apr 26, 2008)

Madliz said:


> I always thought it was SKIers for spending the kids' inheritance, but SKIns does seem to have more attitude.
> Maybe you'd consider yourselves WOOFs, too, not only for your love of dogs but as Well Off Older Folk. Possibly even GOFERs - Genial Old Farts Enjoying Retirement? :eyebrows:


Well-off compared to some, not so compared to others, though. I would never plead poverty but I would say we are comfortable and yes, we're certainly enjoying our lives here, both of us, although we each do slightly different things, as we did in the UK.
In fact, we do more or less what we would have done if we'd stayed in the UK after giving up work, walking the dogs, eating out now and then, seeing friends, reading, shopping...Of course it's nicer doing it in a more pleasant climate - probably an understatement, that. We had a nice old cottage in the UK, we've got a nice house here, only difference being that we don't own our house here so we've no worries about maintenance.
Because our life is in so many respects unaltered I wonder at people who talk about 'living the dream'. As Jo always reminds us, it's the same old stuff, different setting to do it. I think living away from the UK has calmed me down a bit, I try not to get so wound up about trivia, but I have smashed two laptops in a fit of frustrated rage in the past two years and any calmness may be due to the drugs I've been prescribed for heart problems.

Thinking about it, we are defo GOFERs. I like that. But we can be easy-going because we are living within our income, we made sure we could do that with a lifestyle the same as we enjoyed in the UK and I think that too many people got so caught up in the 'dream' that they failed to pay enough attention to mundane things like fluctuating exchange rates, tax rises and so on and what impact they might have on their income.


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## Derek H (Dec 7, 2008)

mrypg9 said:


> Derek, my partner and I have hit on the ideal worry-free solution. We are unrepentant SKINs(Spending Kids Inheritance Now).
> This is for two reasons: one because we don't believe in inherited wealth, we both made our own way in life in business (she) and professionally (me) each starting with nothing and secondly my son and his wife are better off than we've ever been and his wife's parents are old and loaded.
> 
> When I told my son of our intentions he nodded in agreement but after a moment's reflection asked 'But what will you do if your money runs out sooner than you expected?'
> ...


I admire your philosophy. Sometimes I wish I could follow something similar. But, and their always is a but, I'm just not made that way.
I think I still need to help my kids. I say kids, they are both over 30, have degrees and are making their way in the world. 
My old man was a tight, self centred hateful man. I've always tried to be the opposite. Working every hour I could to give them what I thought the family needed. It's only now I realise they only wanted the Dad who had time to play with them like "other Dads".
If I, or really we, spent the kids inheritance, which is not going to be a fortune, the kids will never be able to get a place of their own. Yes we managed, despite Thatcher, it was one hell of a struggle. Our kids where involved in that struggle. So perhaps, they have done their bit.
I'm over 65, still working full time mainly because until I can convince my wife to go to Spain, I wouldn't know how to fill my days. Please don't suggest volunteering. If I work, I get paid. Done it before, and was left with a very nasty taste in my mouth. To many "look at me, aren't I good's". " Take all the credit, none of the responsibilities". 
I feel I'm havin' a bit of a rant. I tend to do that, sorry.

If your having a sun downer, like Hepa yesterday, have one for me. I'm working tomorrow. And thanks for your input,
Derek


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## mrypg9 (Apr 26, 2008)

Derek H said:


> I admire your philosophy. Sometimes I wish I could follow something similar. But, and their always is a but, I'm just not made that way.
> I think I still need to help my kids. I say kids, they are both over 30, have degrees and are making their way in the world.
> My old man was a tight, self centred hateful man. I've always tried to be the opposite. Working every hour I could to give them what I thought the family needed. It's only now I realise they only wanted the Dad who had time to play with them like "other Dads".
> If I, or really we, spent the kids inheritance, which is not going to be a fortune, the kids will never be able to get a place of their own. Yes we managed, despite Thatcher, it was one hell of a struggle. Our kids where involved in that struggle. So perhaps, they have done their bit.
> ...


my son is older than yours and it's amazing what a difference ten years can make. He was through a mixture of choosing the right profession, ability and the good fortune of being in the right time and the right place and having a face that fit able to make a good career and get on the housing ladder at an early age. I think it's become much harder for young people to get started these days.
As I said, my son doesn't need my help. He has his own IT contracting company. But I think my contribution to him was given in the past, by making sure he was taught the values of hard work, perseverence and independence as well as consideration for others, good manners and self- respect. My mum was a widow, scrubbed floors for a living and could give me nothing other than security, stabilty and a respect for education.
But I realise that a lot more is needed in today's world. I don't think I would have had such a smooth journey through a secure professional career if I were starting out nowadays.
The good times are, sadly, long over.


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## Derek H (Dec 7, 2008)

mrypg9 said:


> The good times are, sadly, long over.


Amen to that.
Derek


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## mrypg9 (Apr 26, 2008)

Derek H said:


> Amen to that.
> Derek


I have a lot of sympathy for young people these days. We baby boomers had a much easier path through life and ironically it's a fact that life is better for us retired oldies of my age than ever before. All this concern about Spanish Inheritance Tax is evidence of that. When my mum died we found her life savings rolled up and tucked away in a corner of her wardrobe: £300 after over sixty years of hard work. I wish she had spent it on riotous living but she wasn't like that and besides you can't live riotously on £300.

Agree with you to some extent about volunteering but my experience has luckily been nothing like yours. All the people I've worked with whether as political activists, community volunteers, trades unionists or for animal charities have been hard-working people, shouldering their share of any responsibilities. 

You don't need my advice but I'd say that the most important consideration when planning to live in Spain is 'have I sufficient income to live as I did in the UK with a surplus to meet all unexpected events'. I know that's stating the bleedin' obvious but as another poster wrote the other day, many immigrants come here on a wing and a prayer. No wonder 'dreams' turn to nightmares.

We're not rich by any means, neither are we poor. But we have the means to cope with whatever bad luck life throws at us. Small example: last week I needed two new tyres for my LR Disco, the washing machine and fridge needed repair and I had to call in an expert as the water in my pool resembled pea soup despite all my efforts to cure it. Plus the car insurance was up for renewal that week...

I hope everything works out well for you because with enough money and the right frame of mind life can be good here.


P.S. I suspect your views about Mrs. Thatcher are very similar to mine


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## Derek H (Dec 7, 2008)

mrypg9 said:


> I have a lot of sympathy for young people these days. We baby boomers had a much easier path through life and ironically it's a fact that life is better for us retired oldies of my age than ever before. All this concern about Spanish Inheritance Tax is evidence of that. When my mum died we found her life savings rolled up and tucked away in a corner of her wardrobe: £300 after over sixty years of hard work. I wish she had spent it on riotous living but she wasn't like that and besides you can't live riotously on £300.
> 
> Agree with you to some extent about volunteering but my experience has luckily been nothing like yours. All the people I've worked with whether as political activists, community volunteers, trades unionists or for animal charities have been hard-working people, shouldering their share of any responsibilities.
> 
> ...


We nearly had to declare our selves bankrupt 15 or so years ago. No thanks to a major supermarket, 'spose every little helps.
It was only the value we had in the house saved us. So, having finally paid for it a second time, we are able, by continuing to live frugally, save some money. We save my wages, and live on my pension and OH disability pension. It will be another 8 years before OH gets her OAP (thank you Cameron). 

So when we come over, I will have no other expectations than to be a bit warmer, See a lot more of the sun, have the sun ease our aches and pains, and also prevent my SAD kicking in. Maybe even able to go out to a restaurant 
now and again.
On the subject of The Iron Lady, nearest thing I thought I'd ever see to a fascist, that is until Farage ( rhymes with garage ). I was brought up in Finchley. Took me 21 year to vote against her. Makes you wonder why the working man vote against himself? ( working woman too ). Life remains a mystery. 

Derek

Just noticed ! Is this getting, off thread? Having said that, I enjoy your input. even if I do not always agree with you. Or you with me. Common ground over Mrs T.


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