Inheritance Tax In Spain For Non Eu Residents?
- Víctormanuel Paz
EXAMPLES: Spanish Inheritance tax calculator in Andalusia –
- Dutch siblings Frank and Mark inherit their father’s property in Almuñécar , appraised at 300,000 euros. In this case, the answer is clear, each of them would pay zero in Inheritance Tax.
- Now siblings Frank and Mark inherit their older brother Jan’s property in Fuengirola , appraised at 300,000 euros. In this case, each would inherit 50% of the property, appraised at 150,000 euros. The only bonus that they may apply is for the first 7,993. 46 euros, for which reason each of them would pay the Treasury an amount of €31,393. 56
- Lastly, siblings Frank and Mark inherit their friend Martin’s property in Marbella , appraised at 300,000 euros. In this case, each would inherit 50% of the property, appraised at 150,000 euros. No reduction can be applied in this case, for which reason they would pay taxes on the entire amount received, resulting in a payment of €42,523. 07 from each.
What are the inheritance rules in Spain?
What are the inheritance laws in Spain? – Amendments to the succession bill were introduced here in Spain in 2015 to fall in line with European regulation 650/2012 which can have significant implications for some inheritance beneficiaries. It’s important to be aware of your individual situation and update your will, if necessary, so as not to leave your beneficiaries with problems and, potentially, in lengthy litigation cases fighting over an inheritance.
Inheritance tax is determined by the Act on Inheritance and Gifts Tax and regulated by each autonomous region. Depending on where you live will affect the amount you pay in inheritance tax. If you are a resident of Spain for the past five years you will be subject to regional inheritance tax regulations.
If you are a non-resident living in Spain, then you will be subject to national inheritance tax regulations. The general Spanish Succession Law stipulates that your descendants (children) automatically inherit at least two-thirds of your Spanish estate, with priority over a surviving spouse.
Previously foreign nationals were entitled to leave their estate to their chosen beneficiary as long as the law of their native country allowed. But the 650/2012 regulation means that this is no longer the case.
Now you are beholden to the law of the country you reside in, not your native state, unless you explicitly choose this law governing your succession in a will. If you want to avoid forced legal heirs, it is important that you grant a will. If you own property in Spain, it’s likely that you were recommended to set up a Spanish will during the purchase.
- If you purchased your property before 2015 then it’s time to review your will with a lawyer, as before this date you had free testamentary disposition in the will, which is now null and void, unless you chose your nationality law to govern your inheritance in a will;
Example: if you are a British national who left the majority of your Spanish estate to your second wife. Choosing to leave your children from your first marriage only a smaller percentage or nothing from your estate, this testament would now be overruled by the Spanish Succession Law.
- With your children named as inheritors of your estate by law, not your spouse;
- The UK did not sign up to Brussels IV or European Regulation 650/2012 (neither did Denmark or Ireland), so your succession is regulated by UK law;
Still, if you are a UK national with real estate assets just in Spain, UK Law will forward your succession to Spain.
What happens if a British person dies in Spain?
Register the death and obtain a death certificate – Deaths must be registered in the country where the person died. In Spain, the funeral director will arrange for the registration of the death with the local Spanish civil registry, who will issue a death certificate.
Local death certificates will be in Spanish and do not show the cause of death. If you need an English translation you need to pay for it. You can also apply for multiple copies of the standard death certificate and an international multilingual version through your funeral director.
Alternatively, you can request additional Spanish death certificates by accessing the Spanish Ministry of Justice website. You do not need to register the death in the UK. The local death certificate can usually be used in the UK for most purposes, including probate.
If you wish, you can register the death with the Overseas Registration Unit. You can buy a UK-style death certificate, known as a Consular Death Registration certificate. A record will be sent to the General Register Office within 12 months.
You need to tell the local authorities if the deceased suffered from an infectious condition, such as hepatitis or HIV, so they can take precautions against infection.
Is there a time limit to claim inheritance in Spain?
Spanish law dictates that inheritance tax should be declared within six months of the date of death. This six-month period is then added to the statute of limitations, so in effect the period stretches for four years and six months.