Inheritance Tax In Spain

[cris r]

Any advice.....we own a property in Spain, If say I died would my husband have to pay inheritance tax on my half of the house. We don't live over there we only use it as a holiday home. If we both died our spanish will says the property is left to our son. Anyone had any dealing with this type of problem. Is it worth having a word with a Spanish solicitor
Thanks for any advice

[Buenchico]

>>>We don't live over there we only use it as a holiday home

So HMRC will regard you as domiciled in the UK and its out inheritance tax laws that will apply:
https://www.gov.uk/inheritance-tax/inheritance-tax-when-someone-living-outside-the-uk-dies
(Although that link refers to people living overseas it also covers the rules for those who don't).

Hence UK IHT will be applied where relevant. However IHT is not payable on anything left to a spouse (or civil partner) where that spouse/partner is permanently resident in the UK.

So, if you alone were to die then (I assume, since you've not stated otherwise, that) the whole of your Spanish property would pass to your husband. Upon his death your combined IHT exemption (i.e. TWO lots of £325,000 [at current rates]) would be applied, so IHT would only be payable on that part of your husband's estate (if any) exceeding £650,000.

See here for full information about IHT:
http://www.hmrc.gov.uk/inheritancetax/understand/index.htm

However I'm concerned to read the phrase 'our Spanish will'. I sincerely hope that you've each only got ONE will; if you've got two then either (depending upon the wording) the later one will revoke the earlier one anyway or you'll risk the surviving partner (or later your son) having a large part of their inheritance gobbled up in legal fees trying to sort everything out!

[Peter Pedant]

Hi Chris I thought their Spanish property had to be disposed on death according to the local spanish law

for which a spanish will would be suitable, without a revocation clause

and the English property, and English will also without a revocation clause


and wont the Spanish taxman say, come on come on I want my share - I am aware there are tax treaties...

I am aware this is a complex area.

http://www.telegraph.co.uk/news/9523298/Bernard-Matthewss-children-in-will-row-with-mistress.html

is a salutory case.

[DonnaK]

Hello cris r,
Spanish Inheritance tax depends on where the assets are located and how much the assets are worth at the time of death. If you or your spouse died you would probably have to pay inheritance tax in Spain. Also your son may have to pay IHT. You would also need to both have Spanish Wills to to make easier if you own any assets in Spain. It is worth getting in contact with an English speaking lawyer in Spain. Good luck.