# Last Will and Testament



## Catalunya22 (Apr 25, 2020)

Can anyone advise on this:

I am a Permanent Resident of Spain and also a Tax Resident of Spain.

I have made a Spanish will, to be administered under Spanish law, for my assets in Spain.
It basically all goes to my spouse...we have no children and my parents are dead. So no problem with the forced inheritance laws.


NOW I need to make a will for my assets in England. Can I specify in that will that it is to be administered under ENGLISH law? Some will go to my spouse, and the rest to my brother and sisters.

I assume for my Spanish will Inheritance tax will be whatever the Spanish rate is....although it will be minimal if going to spouse.

BUT....For my English will, Does English Inheritance tax apply or Spanish Inheritance tax.

Any help would be greatly appreciated.


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## The Skipper (Nov 26, 2014)

Catalunya22 said:


> Can anyone advise on this:
> 
> I am a Permanent Resident of Spain and also a Tax Resident of Spain.
> 
> ...


The EU passed a directive a few years ago giving citizens living in another member country the right to make a Will in accordance with their own country's inheritance laws. In the case of British residents living in Spain, that ensured that they were free to name whoever they wanted in their British Will. We took advantage of this directive and made a British Will before a Notary in Alicante. The Notary told us that loads of Brits were doing the same as us. The only thing that I am now wondering is whether Brexit affects our rights under this EU directive?


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## snikpoh (Nov 19, 2007)

The Skipper said:


> The EU passed a directive a few years ago giving citizens living in another member country the right to make a Will in accordance with their own country's inheritance laws. In the case of British residents living in Spain, that ensured that they were free to name whoever they wanted in their British Will. We took advantage of this directive and made a British Will before a Notary in Alicante. The Notary told us that loads of Brits were doing the same as us. The only thing that I am now wondering is whether Brexit affects our rights under this EU directive?


... but the original question was really about taxation.

Surely, in UK, the estate is taxed and not the individual so UK tax will be paid and nothing to Spain??


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## Catalunya22 (Apr 25, 2020)

snikpoh said:


> ... but the original question was really about taxation.
> 
> Surely, in UK, the estate is taxed and not the individual so UK tax will be paid and nothing to Spain??


That was MY understanding.

I´m just checking to see what others think.


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## Roy C (Sep 29, 2012)

We currently have two Wills and still UK resident. On the spanish one tax would be paid in Spain and with the UK will it will be paid in the UK. If we do manage to get residency I see no reason why that would change with which country received the tax.


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## Catalunya22 (Apr 25, 2020)

That was my question really. If I am RESIDENT in Spain and TAX RESIDENT would Spanish Inheritance tax apply to BOTH wills or Spanish tax on the Spanish will and UK tax on the UK will.


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## lard_ascending (Sep 16, 2020)

I believe that the situation for tax is thus:

UK assets left to UK residents would not face Spanish IHT.

UK assets left to Spanish residents would face Spanish IHT, allowing for UK tax paid

Spanish Assets left to Spanish or non-Spanish residents would face Spanish IHT.

Whether the will is drawn up under Spanish or UK law will affect the distribution of assets and not the tax situation.


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## Catalunya22 (Apr 25, 2020)

My understanding is that with my Spanish will where everything goes to my spouse there will be Spanish inheritance tax...although it will be minimal because it is left to a spouse.

On my UK will any assets left to brothers and sisters will be subject to UK Inheritance tax
On my UK will any assets left to my Spanish spouse will not atract inheritance tax in the UK because anything left to a spouse is tax free. It may atract a small amount of tax in Spain

On the Uk side we have a tax free allowance of 325,00 pounds (PLUS anything given to a spouse is tax free.


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## kaipa (Aug 3, 2013)

Catalunya22 said:


> My understanding is that with my Spanish will where everything goes to my spouse there will be Spanish inheritance tax...although it will be minimal because it is left to a spouse.
> 
> On my UK will any assets left to brothers and sisters will be subject to UK Inheritance tax
> On my UK will any assets left to my Spanish spouse will not atract inheritance tax in the UK because anything left to a spouse is tax free. It may atract a small amount of tax in Spain
> ...



Spouses in Spain are subject to tax on inheritance unlike in UK where there is no tax. UK assests left to UK residents are subject to UK laws. Spanish assests left to UK residents subject to Spanish laws.
Leaving your UK assests to your spouse will incur double taxation( if over certain amounts). Assests will be taxed first in UK. They will then be subject to Spanish IHT ( depending on regional variations).


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## kaipa (Aug 3, 2013)

I am wrong: uk assests left to spouse are free of tax but subject to Spanish IHT so no double taxation


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## kaipa (Aug 3, 2013)

Catalunya22 said:


> Can anyone advise on this:
> 
> I am a Permanent Resident of Spain and also a Tax Resident of Spain.
> 
> ...


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## Catalunya22 (Apr 25, 2020)

Because now I have a ten year permanent Resident card and am in the process of registering with the Spanish Tax Authorities and need to make sure my Wills are correct. And the question was asked assuming I am a Tax resident of Spain...which I will be.
Is that ok with you?


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## Isobella (Oct 16, 2014)

If a tax resident in Spain inherits a UK property (or any other assets) you will be taxed in uk. But if Spanish tax is higher the difference will be due in Spain.

Eg inheritance tax due UK 30,000
Tax due in Spain law 40,000

Tax due in Spain. 10,000
Having a will stating English law applies only concerns who you can leave your assets to not taxation.


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## Catalunya22 (Apr 25, 2020)

Isobella said:


> If a tax resident in Spain inherits a UK property (or any other assets) you will be taxed in uk. But if Spanish tax is higher the difference will be due in Spain.
> 
> Eg inheritance tax due UK 30,000
> Tax due in Spain law 40,000
> ...


OK. Thanks. Having an English will stating that it is to be administered under English law only avoids the Forced Inheritance law in Spain then??
For example, under Spanish law you cannot disinherit your children .....plus other things about how much you HAVE to leave to certain family members.
Having an English will administered under English law avoids that.


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## kaipa (Aug 3, 2013)

Isobella said:


> If a tax resident in Spain inherits a UK property (or any other assets) you will be taxed in uk. But if Spanish tax is higher the difference will be due in Spain.
> 
> Eg inheritance tax due UK 30,000
> Tax due in Spain law 40,000
> ...


Isobella- Are you sure that you just pay the difference? Imagine you have exceeded your UK IHT threshold and are taxed 40% of say £100,000. Doesnt spainish law then also want to tax on that £100,000 again?


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## Catalunya22 (Apr 25, 2020)

kaipa said:


> Isobella- Are you sure that you just pay the difference? Imagine you have exceeded your UK IHT threshold and are taxed 40% of say £100,000. Doesnt spainish law then also want to tax on that £100,000 again?


I don´t think you would pay it twice because of the double taxation agreement between the two countries....Or if you did pay it twice you would be able to claim a refund from one of them.


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## kaipa (Aug 3, 2013)

Catalunya22 said:


> kaipa said:
> 
> 
> > Isobella- Are you sure that you just pay the difference? Imagine you have exceeded your UK IHT threshold and are taxed 40% of say £100,000. Doesnt spainish law then also want to tax on that £100,000 again?
> ...


This is where I am confused as I was told that the double taxation is only for income and that when it comes to IHT there is no agreement. Anyone know which is correct?


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## Catalunya22 (Apr 25, 2020)

kaipa said:


> This is where I am confused as I was told that the double taxation is only for income and that when it comes to IHT there is no agreement. Anyone know which is correct?


You are correct...but see this excerpt from BF

There is no double tax treaty signed between the two countries on inheritances, however if inheritance tax is paid in the UK the amount is usually deductible against the Spanish liability as per the internal unilateral relief established in the Spanish tax law.


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## Catalunya22 (Apr 25, 2020)

Catalunya has a 99% relief from inheritance tax for spouses


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## Isobella (Oct 16, 2014)

My example was just a simple one. Think I mentioned before the 6 of us inherited a Spanish property from my Aunt. Some were Cousins and 2 resident in Spain. We had to hire a Lawyer. Don’t know if the law has changed, was about ten years ago. We didn’t get a fortune at the end Didn’t have to pay tax twice though.

I think Lynn recently had an inheritance from UK maybe she can fill us in on an update.


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## Lynn R (Feb 21, 2014)

Isobella said:


> My example was just a simple one. Think I mentioned before the 6 of us inherited a Spanish property from my Aunt. Some were Cousins and 2 resident in Spain. We had to hire a Lawyer. Don’t know if the law has changed, was about ten years ago. We didn’t get a fortune at the end Didn’t have to pay tax twice though.
> 
> I think Lynn recently had an inheritance from UK maybe she can fill us in on an update.


Mine wasn't subject to UK IHT as the value of the estate was well below the threshold. We declared it to HMRC as you have to before getting the grant of probate. I haven't received the inheritance yet as the sale of the property involved still hasn't been finalised (although it should be very shortly) so I haven't yet declared it for Spanish IHT (although by not doing so, as more than 6 months has now elapsed since my aunt's date of death I will now have to pay an additional penalty for late declaration - 5% I believe if the declaration is made within the second 6-month period following the death). As my inheritance was from a more distant relative the Spanish regional exemptions and additional allowances applicable to inheritances from spouses or parents don't apply.


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## snikpoh (Nov 19, 2007)

Catalunya22 said:


> You are correct...but see this excerpt from BF
> 
> There is no double tax treaty signed between the two countries on inheritances, however if inheritance tax is paid in the UK the amount is usually deductible against the Spanish liability as per the internal unilateral relief established in the Spanish tax law.


And that's the key - "usually"

It is not guaranteed.

They are different taxes - inheritance tax in UK and succession tax here


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