# Inheritance from UK



## cushT (Nov 22, 2013)

Hello everyone

Pleased to be here.

I received a five-figure cash inheritance from my parents in the UK.
I had the cash transferred to a Spanish bank.
My wife phoned the tax office to enquire about IHT.
She was told that I would need sworn translations of the death certificate, Will etc. and a ‘La Haya Aposttile’, whatever that is. Seems like more than I’m prepared to bother myself with.

The amount of hassle and expense I have to go through to prove I have inherited this money so that I can hand over about 5K to the tax man is simply unbelievable. 
And I am a resident in Andalucia.

Has anyone been in this situation? I would appreciate any feedback.

Thanks

cushT


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## snikpoh (Nov 19, 2007)

cushT said:


> Hello everyone
> 
> Pleased to be here.
> 
> ...


Unfortunately, you may well find that you get a big tax bill - especially as you rang them and actually told them that you had inherited some money - I hope no personal details were given!

If you read up on succession tax in Spain or IHT in UK, there are many interesting articles on the topic.

I don't see how you can avoid this tax.


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## cushT (Nov 22, 2013)

Thanks snikpoh

I suppose not. As much as I dislike handing money over to this mafia I suppose I'll have to do it.


I've also found out that any deposit or transfer of €3000 or over starts alarms ringing in Hacienda. Banks also question it. This limit was originally applied to stop money laundering.
When my wife spoke to the correct tax department - in Madrid - she didn't hand over any personal information. Unfortunately the smoking gun is in my bank account.

Thanks

cushT


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## gus-lopez (Jan 4, 2010)

cushT said:


> Thanks snikpoh
> 
> I suppose not. As much as I dislike handing money over to this mafia I suppose I'll have to do it.
> 
> ...


On receipt your bank would have had to assign a code number to it which ties up with a Hacienda list of what the transfer is /was for. 
when I made my first transfer ,years ago, they asked what it was & assigned the code number relating to 'personal savings' . Since then any time I transfer now they automatically assign the same code. :lol:


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## cushT (Nov 22, 2013)

Thanks Gus

I suppose everything depends on the code then.
Anyway, I'm going to talk to a lawyer next week.
I'll let you know what happens.

cushT


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## kurt85 (May 7, 2013)

Best thing for you to do is to see a Gestoria, I can recommend one if you wish, they will arrange all the forms for you, you need to speak to them as you are liable for IHT tax as it stands now, you do still have you personal allowance which is just under 16k per year against all income received.

Regards,

Kurt


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## cushT (Nov 22, 2013)

Thanks Kurt

I might take you up on that.

I've found a lawyer 5 mins down the road that deals with impuesto de sucesiones or IHT. I'll be having a chat with them this Friday. 

Cheers

cushT


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## Goldeneye (Nov 12, 2011)

I look forward to hearing the outcome of this, our two main concerns and the reason we have not 'yet' left Canada are 
1) Access to affordable healthcare 
2) Future IHT of death of remaining parent in the UK

I'm all for ..... Tax 'avoidance' but NOT Tax Evasion..

from what I understand, in the UK and Canada the estate does a final tax return selling any stocks etc, it may have held and capital gains paid. The estate is passed on to the beneficiaries who are not then liable for further tax.
In Spain it is different, any IH is then in effect 'taxed again' as if it were income.. 

Someone please correct me if I am wrong, everything else doesn't seem to have this 'double dipping' yet when it comes to an overseas estate settlement it would seem that is the case,.


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## snikpoh (Nov 19, 2007)

Goldeneye said:


> I look forward to hearing the outcome of this, our two main concerns and the reason we have not 'yet' left Canada are
> 1) Access to affordable healthcare
> 2) Future IHT of death of remaining parent in the UK
> 
> ...


In Canada and UK, you have inheritance tax where the deceased's estate is taxed.

In Spain it's the inheritor who is taxed (succession tax) and therefore it's treated like 'income tax' or a 'capital gain'.


I would have suspected that healthcare would be cheaper in Spain than in Canada?


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## Goldeneye (Nov 12, 2011)

snikpoh said:


> In Canada and UK, you have inheritance tax where the deceased's estate is taxed.
> 
> In Spain it's the inheritor who is taxed (succession tax) and therefore it's treated like 'income tax' or a 'capital gain'.
> 
> ...


Yes, I realize that, but from what I understand is that if you live in Canada or UK the deceased estate is taxed... If you are living in Spain YOU as an inheritor pay capital gains.. on basically an estate that has already been taxed..
If I stay in Canada ( or the UK ) it is taxed once as part of the deceased estate.. The beneficiaries then receive their portion of the estate and are not liable for further tax.. If you live in Spain ~ It is treated like 'income' and is then taxed as such.. Which can be quite a hefty amount. 

As for healthcare, here in Canada I pay $120 a month which covers both DH and myself. 
In Spain It would be a heck of a lot more and not cover all the so called 'pre-existing conditions' my DH has.


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## CapnBilly (Jun 7, 2011)

Goldeneye said:


> Yes, I realize that, but from what I understand is that if you live in Canada or UK the deceased estate is taxed... If you are living in Spain YOU as an inheritor pay capital gains.. on basically an estate that has already been taxed.. If I stay in Canada ( or the UK ) it is taxed once as part of the deceased estate.. The beneficiaries then receive their portion of the estate and are not liable for further tax.. If you live in Spain ~ It is treated like 'income' and is then taxed as such.. Which can be quite a hefty amount. As for healthcare, here in Canada I pay $120 a month which covers both DH and myself. In Spain It would be a heck of a lot more and not cover all the so called 'pre-existing conditions' my DH has.


 I was listening to Bill Blevins talking about this on the radio at weekend. He said that although it's not covered in the Double Taxation Agreement (DTA) between Spain and the UK ( he didn't mention Canada, but I guess it is similar), he did say that generally they allow the tax paid in once country to be offset against the other. The bottom line though, is that you pay the maximum amount. So if the tax in Spain is say £20k, and £3k has already been paid in the UK, then they will take that into account. I'd be interested to see how that that works in practice though. So, you're not taxed twice, but succession tax in Spain is extremely high, and, IMHO is to be avoided if at all possible.


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## gus-lopez (Jan 4, 2010)

Goldeneye said:


> Yes, I realize that, but from what I understand is that if you live in Canada or UK the deceased estate is taxed... If you are living in Spain YOU as an inheritor pay capital gains.. on basically an estate that has already been taxed..
> If I stay in Canada ( or the UK ) it is taxed once as part of the deceased estate.. The beneficiaries then receive their portion of the estate and are not liable for further tax.. If you live in Spain ~ It is treated like 'income' and is then taxed as such.. Which can be quite a hefty amount.
> 
> As for healthcare, here in Canada I pay $120 a month which covers both DH and myself.
> In Spain It would be a heck of a lot more and not cover all the so called 'pre-existing conditions' my DH has.


If the estate is in Canada /UK then yes it would have been taxed & the inheritors received it free from any personal tax. If they live here however they come under the spanish rules which , as capnbilly has said, hopefully would take into account what has already been paid. 
If the estate was Spanish however, there is no tax to pay ON the estate but ONLY by the inheritors. If the inheritor of said Spanish estate happened to live in the UK then even though he'd have paid spanish tax to inherit, the HMRC would definitely want to have a good investigation to ensure that they couldn't get some more ! 
So ,it's swings & roundabouts.


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## Goldeneye (Nov 12, 2011)

Nooo, He is talking about an Estate in the UK, he lives in Spain... The estate (which is in The UK ) pays the capital gains and all other taxes owed then the remainder gets passed to the beneficiaries.. Who receive it tax free.. (that would be the case if he was still living in England) or in my case in Canada.. However, living in Spain you are then taxed on the estate as if it was 'income' by the Spanish system.......This is not like owning a house in Spain and someone dying and the estate going to spouse or Kids.. The taxation in this instance is VERY different.... In this instance (Spain) there is 'double dipping' HMRC as well as Revenue Canada treat it VERY differently.


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## Lolito (Aug 25, 2012)

It looks like a lot of hassle to me... I hope no-one leaves me any money anywhere!


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## gus-lopez (Jan 4, 2010)

Goldeneye said:


> Nooo, He is talking about an Estate in the UK, he lives in Spain... The estate (which is in The UK ) pays the capital gains and all other taxes owed then the remainder gets passed to the beneficiaries.. Who receive it tax free.. (that would be the case if he was still living in England) or in my case in Canada.. However, living in Spain you are then taxed on the estate as if it was 'income' by the Spanish system.......This is not like owning a house in Spain and someone dying and the estate going to spouse or Kids.. The taxation in this instance is VERY different.... In this instance (Spain) there is 'double dipping' HMRC as well as Revenue Canada treat it VERY differently.


Yes I understand the situation & it is one of the drawbacks of living in another country & why everyone here deals in cash & hides everything !


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## cushT (Nov 22, 2013)

kurt85 said:


> Best thing for you to do is to see a Gestoria, I can recommend one if you wish, they will arrange all the forms for you, you need to speak to them as you are liable for IHT tax as it stands now, you do still have you personal allowance which is just under 16k per year against all income received.
> 
> Regards,
> 
> Kurt


Hi Kurt

Would you please PM me (if possible) the contact info for your Gestoria.
My lawyer gives me the impression that she intends to fleece me.

cushT


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## lacanuta (Feb 6, 2014)

My wife, her sister and I are going to buy a villa in Javea and all being in our 60's are equally concerned about inheritance taxation. I noticed some web sites where they offer a scheme to side step IHT by buying or transferring your property into a British registered company with shares allocated. Apparently upon the death of one shareholder the shares are divided up between the remaining directors/shareholders as per the memorandum and articles of association. There is no tax due on a share transfer within a British company. Has anyone else heard of this or better still have experience of such a scheme and is it legal?


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## snikpoh (Nov 19, 2007)

lacanuta said:


> My wife, her sister and I are going to buy a villa in Javea and all being in our 60's are equally concerned about inheritance taxation. I noticed some web sites where they offer a scheme to side step IHT by buying or transferring your property into a British registered company with shares allocated. Apparently upon the death of one shareholder the shares are divided up between the remaining directors/shareholders as per the memorandum and articles of association. There is no tax due on a share transfer within a British company. Has anyone else heard of this or better still have experience of such a scheme and is it legal?


I think you need to investigate this very carefully. It's certainly legal but there are many costs associated with limited companies (accountants bills, submissions to companies house etc.). Also, you would have to declare these share holdings now with the advent of Modelo 720 (provided the value of assets are more than 50k euros - in total not per share holder).


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## lacanuta (Feb 6, 2014)

Yes, the company who quoted me mentioned all those requirements and as their fee is £6000 to set it all up including attending the notary I guess it may be a reasonable price to pay.


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## cushT (Nov 22, 2013)

Hello

Here's my update.

I finally spoke to my bank manager who told me not to worry about it.
He also added - if it had been a cheque the bank might have informed the tax office.
Also, I'm not talking about a great amount here.

cushT


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## extranjero (Nov 16, 2012)

cushT said:


> Hello
> 
> Here's my update.
> 
> ...


" not to worry about it"- what does that mean? Do you not have to still inform the taxman, then?
Cap'n Billy, so how is IHT. To be avoided then? As a resident of Murcia I would love to know!
What do other residents of Murcia feel about the allowances being abolished?
What legal ways do they have of avoiding it?


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## sue-smiley (Jan 31, 2014)

*Hi*



snikpoh said:


> Unfortunately, you may well find that you get a big tax bill - especially as you rang them and actually told them that you had inherited some money - I hope no personal details were given!
> 
> If you read up on succession tax in Spain or IHT in UK, there are many interesting articles on the topic.
> 
> I don't see how you can avoid this tax.


Interesting. How would it be if you left it in a UK Bank account. A friend of mine has lived in Cyprus for 15 years. Never opened a bank account in Cyprus. Just drew money out when she needed it from her UK Bank. Problem is I suppose if you want to use a large amount of money and tranfer costs.

Certainly interesting post. No real knowledge I'm afraid just enjoyed your post


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## extranjero (Nov 16, 2012)

sue-smiley said:


> Interesting. How would it be if you left it in a UK Bank account. A friend of mine has lived in Cyprus for 15 years. Never opened a bank account in Cyprus. Just drew money out when she needed it from her UK Bank. Problem is I suppose if you want to use a large amount of money and tranfer costs.
> 
> Certainly interesting post. No real knowledge I'm afraid just enjoyed your post


You would still have to declare it.if it was over 50,000 euros it would have have to be declared on the asset reporting form720 as well.


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## sue-smiley (Jan 31, 2014)

*Hi*



extranjero said:


> You would still have to declare it.if it was over 50,000 euros it would have have to be declared on the asset reporting form720 as well.


Never really knew the in' s and outs. Looking to moving to the Canaries in about 6 months so interesting to know. Hope all goes well for you


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