# Bit Morbid - but what happens?



## hopalong35 (Mar 2, 2015)

Hi all

I have a question about death (sorry!)

My Dad wants to buy a place in Murcia but is stressing out about what would happen if he dies? What would happen in that case?

He is thinking about actually just buying the place in my name - but does that have complications too (I won't be living there)?

Also, as well as property issues - what would happen if he died and had money in a Spanish Bank?

Thanks all!


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## davexf (Jan 26, 2009)

Hola

My children own the house I live in - I have never owned it and will therefore die a pauper and not have to pay tax !!!! 

The British Consulate site has info on what to do if someone dies and is a good starting place 

Davexf


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## extranjero (Nov 16, 2012)

hopalong35 said:


> Hi all
> 
> I have a question about death (sorry!)
> 
> ...


Your dad could take out funeral insurance or a funeral plan
He should make a Spanish will
If he has assets in the UK then he should make a UK will
You will have to pay inheritance tax on his assets in Spain
You will get an allowance against that, but as Murcia has abolished regional allowance, you will not receive it, although there are changes afoot, apparently to make the system fairer, as other regions have very generous allowances.
Have you thought about how your dad will manage if he becomes infirm, or I'll?
If he buys it in your name, you will have non residents tax to pay yearly plus council tax, and community fees if he lives in a community


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## larryzx (Jul 2, 2014)

No real problems with it being in your name, apart from the 'second home tax' but the cost of that against probable inheritance tax is OK. I would though have a power of attorney (Poder), so that he can deal with the everyday things in relation to the property.

Of course if you wanted to sell after your father dies then you would have all the tax problems as non-resident the owner,

But as you say being morbid, I heard of a guy who transferred his house to his much younger partner, and unfortunately the partner died, so he got stuck with IHT.


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## hopalong35 (Mar 2, 2015)

Well I worked out that non-residents tax would be about €300 per year. I understand that council tax and communal fees would need to be paid too - so does that mean I would need a Spanish bank account

If the property is €100000 then inheritence tax would be something like €160000 which is crazy when in the UK you get the first £350000 free from tax.

With that in mind I think it would be better in my name - however I have two more questions - what's the tax you mention if I was to sell it? And also how would my dad show proof of living there? Would I need to give him a zero value rental agreement. I've read he can't do stuff like buy a car if he doesn't have a deed or rental agreement?


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## davexf (Jan 26, 2009)

hopalong35 said:


> With that in mind I think it would be better in my name - however I have two more questions - what's the tax you mention if I was to sell it? And also how would my dad show proof of living there? Would I need to give him a zero value rental agreement. I've read he can't do stuff like buy a car if he doesn't have a deed or rental agreement?


Hola

I got my NIE from the Spanish Consulate in London, and when I started living here simply took the escritura which showed my right to live in the house (an usufruct) and got on the padron - from there all is simple

Davexf


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## hopalong35 (Mar 2, 2015)

davexf said:


> Hola
> 
> I got my NIE from the Spanish Consulate in London, and when I started living here simply took the escritura which showed my right to live in the house (an usufruct) and got on the padron - from there all is simple
> 
> Davexf


Thanks Dave - you are going to be my new friend here for the next few weeks!!


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## extranjero (Nov 16, 2012)

hopalong35 said:


> Well I worked out that non-residents tax would be about €300 per year. I understand that council tax and communal fees would need to be paid too - so does that mean I would need a Spanish bank account
> 
> If the property is €100000 then inheritence tax would be something like €160000 which is crazy when in the UK you get the first £350000 free from tax.
> 
> With that in mind I think it would be better in my name - however I have two more questions - what's the tax you mention if I was to sell it? And also how would my dad show proof of living there? Would I need to give him a zero value rental agreement. I've read he can't do stuff like buy a car if he doesn't have a deed or rental agreement?


In the example you quote, a property of 100000 euros, the IHT couldn't be 160000!
Any assets eg bank account would also have to be taken into account
The IHT is very different from the UK, where it is on the estate, as opposed to Spain where it is on the person
IHT is the reason many do not become resident in Spain!


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## hopalong35 (Mar 2, 2015)

Ok I'm getting an title confused here

Let's say the property is 80000 euros

How much would IHT be if my dad died

How much would annual non resident tax be if it was in my name?

And is there someone or somewhere that this can be cleared up. Looking to go out in April and based on what we've seen we want to get this done Asap


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## extranjero (Nov 16, 2012)

If the house is in your Dads name, you would have a state allowance of just under 16 k euros.
As Murcia has abolished its regional allowances, that would be it .
In a different region you probably wouldn't have anything to pay, as the law has recently changed so that non residents and residents are entitled to the same regionalallowances.
The catastral value is normally less than the price at which the property was bought
and the IHT would be a % ( which varies) of that after the state allowance was deducted.
Of course any other assets, car, bank balance in Spain will also be added to this.
I hope Cap'n Billy who is a guru on tax will be more exact and clarify it for you.


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## extranjero (Nov 16, 2012)

Non resident tax is, I think, 1.1% of the catastral vaue x 24%
I'm sure they will rush to correct me if I'm wrong
Plus you will have the council tax yearly, and monthly maintainence fee if the property is an apartment.
If you rent it out then you have to declare the income from it


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## larryzx (Jul 2, 2014)

extranjero said:


> Non resident tax is, I think, 1.1% of the catastral vaue x 24%
> Plus you will have the council tax yearly, and monthly maintainence fee if the property is an apartment.
> 
> If you rent it out then you have to declare the income from it[/QUOTE
> ...


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## hopalong35 (Mar 2, 2015)

Yeh - he has said he is going to put it in my name. I will then give him a POA so he can get anything done to the apartment as needed. I was going to ask about the rental agreement - so a letter will be enough then?

I was also planning to set up a joint bank account for me and my dad in Spain so that he can access everything that I can - will this be ok?

Had a read through all the stuff needed to be done (forms, police, pardons, etc) - it all seems complicated but then when re-reading it - its not that bad.

All house buying will obviously be helped along by the lawyer, healthcare seems pretty straight forward (although multiple trips to different places seems a pain) 

Buying a car looks like a bit of a headache......but when it comes to do it that should be fine


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## larryzx (Jul 2, 2014)

hopalong35 said:


> Yeh -
> I was also planning to set up a joint bank account for me and my dad in Spain so that he can access everything that I can - will this be ok?
> 
> Had a read through all the stuff needed to be done (forms, police, *padon,* etc) - it all seems complicated but then when re-reading it - its not that bad.
> ...


In theory you cannot have a joint bank account if one party is resident and one non-resident. However, Spain being Spain, I have a joint account with my wife, we are both resident, and my son who is non-resident. In our case, after me paying his water account for 10 years the water company decided that it could only be paid from an account in the name of the contact holder, so the bank made an exception.

Re medical cover,. You do not say how old your father is. If retired then he can get free cover in Spain using a form S1 from DWP. 
Once on the Padron he can buy a car no problem at all.


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## davexf (Jan 26, 2009)

larryzx said:


> Once on the Padron he can buy a car no problem at all.


The law was changed I think in 2008 to allow anyone who owns or rents property in Spain, to be allowed to own a car also. Therefore you don´t have to be on the Padron to be able to buy a car. 

Davexf


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## Isobella (Oct 16, 2014)

If the property is in the Sons name there could be complications if he is married and they get divorced. She would be entitled to half. A trust is safer.


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## davexf (Jan 26, 2009)

Hola
If you think this through, when the father dies, would there be any extra problems if the property was in trust? 
If the son owns the property, nothing happens when the father dies. 
Davexf


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