Spanish Wills and Probate Ltd.
Spanish Wills
and Probate Ltd
P O Box 12
Lymm
Cheshire
WA13 9FE
Tel:
0845 257 7889
From Spain call:
951 190 488
For information on probate in Spain visit: www.spanishprobate.co.uk
Inheritance Tax
Inheritance tax is generally known as IHT
It is not the same in Spain as it is in the UK.
In the UK IHT is paid by the estate before it can be distributed to the beneficiaries.
In Spain it is paid by the beneficiaries.
In the UK, a single person has an IHT "allowance" of £300,000. A married couple has a joint "allowance" of £600,000.
IHT is levied at 40% on anything over these allowances.
In Spain, each beneficiary has an "IHT-free allowance". The rate payable is on a sliding scale: the more you receive and the further away your family relationship to the deceased, the higher the rate.
Please see our < IHT calculator > where you can estimate how much Spanish IHT may be payable.
In the UK, a surviving spouse can receive any amount free of IHT.
In Spain, there is no spouse exemption.
In the UK, your estate pays IHT on your world-wide estate
In Spain, only your assets in Spain are assessed for Spanish IHT.
You have one world-wide estate, and the UK tax authorities will include the value of your Spanish property in the calculations for how much IHT should be paid in this country.
If your property in Spain is a portion of your overall assets, the British Chancellor of the Exchequer features more heavily than his Spanish counterpart when it comes to the size of IHT bills.
In general the methods to save UK and Spanish IHT are mutually exclusive.
In particular
-
Passing some of your Spanish property to your spouse and some to your children, and
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The use of a usufruct
are usually counter-productive. They often do not save IHT for the combined estates, in fact they commonly result in higher IHT bills in this country.
If your Spanish property is a holiday home you may find that the savings you can make in Spanish IHT are small compared to the commitments made to achieve them.
Relief is usually available so you do not have to pay IHT twice in both Spain and the UK.
However, relief is not available for Spanish IHT paid on the first estate by a surviving spouse.
We therefore recommend that in order to protect your world-wide estate from the ravages of Inheritance Tax, your Wills are drafted by a company fully conversant with the relevant laws in both Spain and the UK.
