Inheritance Tax In Spain For Non Residents?

Inheritance Tax In Spain For Non Residents
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.

How can Spanish inheritance tax be avoided?

Tips to reduce inheritance tax in Spain – If you have been living in Spain, but you are not registered as a tax resident and your wealth is located in Spain, especially in the region of Andalucía, it is recommended to move forward with your registration.

Not only it is your obligation to do it, but you could also benefit from the 99% tax deduction mentioned earlier in the blog. Regarding financial assets, specialists recommend moving them to jurisdictions outside of Spain to avoid paying inheritance tax in the country.

In regards to property, it is best to have a mortgage as it reduces the base amount on which the tax rate is calculated.

What happens if I inherit a house 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.

How much is non resident tax in Spain?

How much is non resident tax in Spain? – Non-resident taxpayers in Spain are taxed at the rate of 19-24 % on income earned in Spanish territory or income that arises from Spanish sources such as property. Specific rates apply to other kinds of income.

Do I pay inheritance tax in UK and Spain?

How to avoid the double taxation – No matter if you are a tax resident in Spain or not, you can still be liable to pay inheritance tax in any other country, let’s say the UK. That is something that depends on where you are domiciled. If you are a British citizen in the UK but resident in Spain, you can be asked to pay in both countries. But how does it exactly work? You have two important amounts to consider:

The quantity that is derived from applying the mean tax rate of the inheritance tax in Spain to the capital gains generated from the assets located abroad
The actual amount to be paid abroad in regards to the foreign tax similar to the inheritance tax in the Spanish territory applied to the capital gains

You can deduct the lowest of the two , just in case we are talking about taxation that stems from personal liability.

What happens when an expat dies in Spain?

In this simply guideline we explain how to report the death, how to deal with the funeral parlour, how to obtain the death certificate and how to repatriate the body or ashes. – If you need help with the inheritance procedure in Spain, e-mail us now and we will organise a zoom appointment so that we can discuss how we can help. What to do if someone dies in Spain ?

Call the police. Simply call the emergency number 092 and they will send the police.
Contact a doctor (if you have not called one do not worry as the police will call one for you when they arrive ) who will certify the cause of death and issue a certificate of death
A funeral parlour will be contacted (by the doctor, the police or yourself ) to remove the body (identification must accompany the body in order for it to be moved). If you hafe a funeral plan, call the company.
The funeral parlour will take over and help you from this moment on.
The above is what needs to be done if the person did not decease in a hospital. If he/she deceased in a hospital they will take care of all this and you will then only have to deal with the funeral parlour who will normally take care of everything. If you do not inform of a particular funeral parlour then the police, doctor or hospital will simply call a local one.

When would an autopsy be necessary in Spain? According to Spanish law, an autopsy is mandatory (1) in all cases of accidental death (2) in cases in which the deceased was not attended by a physician at the time of death, and (3) whenever ordered by a Judge. Registration of a Death The certificate of death must be taken to the Civil Registry to formally register the death. The registration includes the date, time and location of the death How long does it take to register the death? The death needs to be registered within 24 hours usually at the local civil register office which is often situated at the local town hall our courts but not always.

(This article was originally published in 2016 but has been updated to include changes introduced by the RD;
463/2020 due to the Coronavirus outbreak) At the end of this article you will know what to do , who to call and what to expect if you find yourself dealing with a death in Spain;

Who registers the death in Spain? Do not worry. Usually the funeral parlour will take care of this , but anyone with knowledge of the death is eligible to make the registration. Once the death registration has been completed, under normal circumstances a burial licence will be issued and the burial or cremation can take place.

The funeral parlour will take care of the burial or cremation and will help organising of the funeral. (please read about the situation during the coronavirus) Funerals in Spain Burial or cremation should take place within 24 to 48 hours (although this can be extended on arrangement with the morgue).

If the deceased has made specific arrangements for a religious service, burial or cremation their wishes should be followed. Burial or internment are most common in Spain. If the deceased or next of kin request a cremation this must be made known to the doctor in charge of certifying the death as it will be noted on the certificate.

Burial/Interment in Spain;
Does burial happen faster than in the U;
K ? Yes;
• Embalmed bodies must be buried within 96 hours (Article 15) • When temporary preservation method is used, bodies must be buried within 72 hour;

• Unembalmed bodies must be buried within 48 hours, but not before the lapse of 24 hours. • The remains of a person who has died as the result of a contagious disease must be buried immediately. Can you request cremation in Spain? Yes you can. The cremation procedures and method are regulated by existing Public Health Service and Municipal regulations which specifically state that written authorisation for cremation, signed by the decedent in life, or a statement from the next of kin indicating that the deceased in life made known his/her desire to be cremated , be presented to the local authorities before cremation may be authorised.

This requirement obviously poses some problems in cases of death when the next of kin is not in Spain;
If the required statement is not available, local burial or embalming will have to take place within 48 hours after death;

In Spain if you wish to be cremated it is convenient to make this statement in your Spanish will. There are many facilities for cremation in Spain and all the funeral parlours are able to have it organised. If you need help with the inheritance procedure in Spain, e-mail us now and we will organise a zoom appointment so that we can discuss how we can help.

Do I need a Spanish will if I own a property in Spain?

Do I need a Spanish will? – It is highly advisable to make a Spanish will if you own assets in Spain, including Spanish property, as by making a will you will ease the administrative burden on the beneficiaries of your estate and ensure certainty for them upon your death.

During the COVID-19 crisis many people are ensuring that their wills reflect accurately what they want to happen to their assets when they die;
Of course, this is in large part because our mortality has been brought into sharp focus by the tragic early deaths of so many people over such a short time span;

It makes most sense to make a Spanish will in relation to Spanish assets. However, it makes more sense to have a will that covers one’s Spanish assets than no will at all. Having a Spanish will means being in Spain or visiting a Notary Public in your own country of residence.

That could be difficult at the moment;
If you need to make a will in your own jurisdiction to cover your Spanish assets, then please be in touch with us;
If you live in England and Wales then we will be able to prepare a will for you to sign now;

If you live in Scotland, Northern Ireland, or another country, then we will be able to ensure that your will is valid and sufficiently clear for your Spanish estate to be administered upon your death. This may be a temporary solution, so that once you are able to travel, or to visit a Notary Public in your own jurisdiction, you will be able to make a Spanish will.

At E&G Solicitors in Spain we are extremely well placed to advise and assist you in relation to your Spanish will , as well as in relation to Spanish estate planning. If you have any questions about whether you need to make a Spanish will, please do be in contact with us.

You can reach us by email at info@solicitorsinspain. com , by telephone on 020 3478 1420 or by completing our contact form .

Can I gift my Spanish property to my daughter?

How to transfer a property in Spain – In Spain, a property or a share of a Spanish property can only be transferred in one of the following ways:

Sale and purchase of the Spanish property
Gifting/donating the Spanish property
By inheritance of the Spanish property
Transfer of Spanish property in payment of a debt

So, if you plan to transfer the ownership of your Spanish property to someone else you will need to decide which form the transfer will take. Each of the methods of transfer will incur some form of Spanish tax (which is likely to be gift tax, property purchase tax, capital gains tax, inheritance tax or a combination of these). The amount of Spanish tax payable in each case varies, as it will be dependent on a number of different factors. These include:

the value of the property in Spain (this may be the cadastral ‘town hall’ value of the property as opposed to the ‘market’ value)
the location of the Spanish property (Spain has 17 autonomous regions which have different tax rates)
the age of the parties (some reliefs may be available)
whether or not the parties are tax residents in Spain
the blood relationship between the parties (different relatives pay different rates of tax depending on how closely they are related to the property owner).

In order to determine the most tax efficient way to transfer your property in Spain, it is advisable to obtain specific advice about which method would be best for you, given the your specific circumstances. If you have not yet bought your property in Spain, it may be better to consider buying property in Spain in the names of your children from the outset, as this may be more cost effective than transferring it later down the line.

What happens to a property in Spain when the owner dies?

Advice on how Spanish inheritance laws apply to your estate – Spanish Inheritance Law states that when you die your property will be shared among your heirs according to the law of your country of origin (unless you are resident in Spain and have no Will, in which case Spanish law and the forced heirs applies).

It is a common misconception that as a foreigner you have to leave your assets in accordance with Spanish law, which imposes certain “forced heirs”. A “foreigner” can make a Spanish Will leaving their own property to the person of their choice.

This Will must contain a declaration that their personal law is governed by the principle of free disposition of property by testament. This is then acceptable to the Central Wills Registry in Spain. Generally, speaking a valid Spanish Will is sufficient to dispose of the estate as you wish.

How much inheritance tax do you pay in Spain?

Gift taxes in Spain – The state treats gift tax and inheritance tax together. Inheritance tax falls due upon any increase of wealth as a result of a third person’s death. On the other hand, gift tax becomes payable on wealth increases because of presents from a living person. Inheritance Tax In Spain For Non Residents Unlike Spanish inheritance tax, however, you must declare gift tax in Spain within 30 calendar days of the gift being presented. Beneficiaries become liable for such payments upon the date they are made. Gift tax is calculated on the net value of the goods and rights in question. It is levied at the same rate as Spanish inheritance tax as described in the table above. The same reliefs also apply.

The definition of such gifts is complex; allowing someone to use your house may constitute a gift for tax purposes, for example. Such gifts are liable for personal income tax on any potential capital gain.

A special rule applies to real estate gifts. In such cases, the municipal tax applicable to the transfer of real estate is also triggered – although there may be certain exemptions. Since 2015, Spain aligned with EU-wide rules on gift tax, offering the same fiscal advantages as other EU countries.

Are UK wills valid in Spain?

Is an English will valid in Spain? – Spanish law recognises a will made lawfully in any jurisdiction. That means that if you make an English will relating to all of your worldly assets, it will include your Spanish property.