Taxman investigates Pensions from outside Spain

If the inheritor is a non resident and the asset is outside Spain, say a bank account in the  UK, then no inheritance tax is payable in Spain.   If the inheritor is resident in Spain, then the same assets in the UK is subject to inheritance tax in Spain. Theoretically it could be traced via the will ( UK or Spanish ), and/or reporting by the UK authorities.

In the UK the tax bill is on the estate,not the inheritor. When you (executor) file for probate and list the assets of the estate, that's when the IHT is calculated, and paid by the executor there and then, or as soon as possible, (except when transferring property to surviving spouse) before the beneficiaries see a penny. I'm not a lawyer but have been executor for several estates. You can transfer assets, including property, into the inheritor's name simply by showing your executor's probate grant,eg, to the land registry or bank. No-one asks to see the will. No-one checks up on whether you disposed of the assets in accordance with the testator's wishes. I can't see where the Spanish authorities would start looking. They'd have to check every beneficiary on every UK will and then figure out if that beneficiary lived in Spain. 

I have no idea what happens when a large estate of a UK resident is left to a Spanish resident. I can't see the UK taxman saying to the executor "Oh, he's left his estate to someone living in Spain so don't bother to give us the £x million we would normally get. Give it to the Spanish taxman instead". My instinct is the UK taxman would say "we are owed £x million from this estate. Give it to us and you can do what you like with the rest". But I might very well be wrong.

This message was last edited by GuyT on 29/05/2014.

I have been following this thread which is very Interesting, we have a place Manilva way that we rent out with good rental, ignoring the rental income as we have a faily big mortgage we intend to retire within two years and possible move to Spain and run our own rental but I am really worried what I will get taxed on my private pension and the wife's, mine Is approx £23500 per year and we both have Sipps that we will use flex drawdown on so I'm wondering will we get hammered for tax in Spain, she will drawdown £10000 per yr for 4-5 years and mine will probably add another £5000-6000 per year for 4-5 years.

Will we be better tax wise keeping under the 6 month limit and just running our rental for the 6 months then going back to UK.

What seems very strange to me is that the Spanish government declares it does not charge tax on a military UK pension.  However, one is required to declare the gross pension income, which is then added to your overall taxable income in Spain.

This, of course, may well lift one to a higher rate of tax.  It all sounds a bit of "Stage Irish" to me and I am Irish.

What seems very strange to me is that the Spanish government declares it does not charge tax on a military UK pension.

That is true as of now. 

Government employee pensions, including military, are ignored  (not declared)  in Spain. I have lived here 27 years and have had such a pension.  However, it would appear the law will change as has been described in the forum.