Inheritance Tax on Irish assets

Hi there,

I am trying to find informatin on what tax is applicable on inheritance of my dad's assets. He has sadly died recently in Ireland and the Grant of Probate is in progress. I am told that In Ireland it takes at least 5 or 6 months to be processed, maybe more.

I live in Cataluña full time. I am not a tax resident in Ireland, only in Spain. 

What do I need to do before the Grant of Probate is processed?

How much tax is applied to such assets, (i.e. inheritance of non Spanish assets)?

Any information would be very much appreciated as I have absolutely no idea how to approach this.

Thanks & Regards in advance

Finner

Presuming your Dad lived, and died in Ireland, then surely you should be asking these questions to a Solicitor / Tax advisor and such like back in Ireland....On the other side of the coin if your Dad lived in Spain, say with you,and was a tax resident in Spain, and was visiting Ireland then died, you should then be asking same questions to a Spanish Solicitor and the such like.

Just a guess but to find  and ask someone on here 'Eye on Spain' who has gone / been through the exact same situation as yourself might be a little difficult, and if by chance they have their situation could have been worlds apart from yours.

If anyone offered you advice who is NOT in the correct Legal Profession concerning your situation you really should think twice about it.

The OP should check with a Spanish Tax expert even if the father lived and died in Ireland because when the heir is a Spanish tax resident, Spanish tax applies on worldwide assets with a credit for any taxes paid in the place where the asset is located.

I would think it would be the same for any citizen of a EU country. When my mother died, I had to declare the money she left me on my Spanish tax return the following year (2016 for income in 2015) although I had to complete the inheritance forms straight away when probate was granted (until then we wouldn't have known how much it was). There was no tax to pay in UK and, as a surviving child in Group 2, I was given a large allowance in the Valencian Region. 

Without looking it up, I think I was allowed an exemption of €100,000 as a Group 2 (over 21 surviving child) and, as the estate was shared with 3 of us (£70,000 each), I had nothing to pay.

This, however, was on the advice of my solicitor so I would suggest seeing a solicitor in Spain as you are resident here. The allowances vary region by region so might not be so generous where you live.

Be careful finner this is an issue for professionals only. Take baz1946 advice.

‘’EU inheritance rules for foreigners in Spain. A change in EU rules on cross-border successions came into effect in August 2015, enabling EU citizens to choose whether the laws of their country of residence or their country of nationality apply to their estate planning. This law also applies to non-EU nationals. However, the rules don't apply in Denmark, Ireland the UK as these countries opted out, although will apply these nationals if they live elsewhere in the EU.’’

A word of warning, if you get this wrong and underpay the Spanish tax authorities they will fine and penalise you heavily, and if you overpay them you will never get your money refunded.

Sorry Duncan but that applies to who you leave your money to, not what you inherit. There are separate inheritance laws but that isn't part of it.

So finner farther’s WILL and residence status is irrelevant? Perhaps more evidence as to why to seek correct professional advice.

I was only using an example to try and to point out to Finner how complicated inheritance can be, but in any case 1-0 to you mariedav

I agree he should get professional advice. Which is why I mentioned we just went to our solicitor who charged €40. Well worth it.

The reason UK, Denmark and Ireland are mentioned is because they don't have succession laws like Spain. You can leave your property and money to whoever you want. In Spain you leave it in equal parts to spouse and children hence the reason we can now stipulate the will in Spain is to be handled in accordance with the UK laws and can leave it all to the Battersea Dog's Home if we want to.

hence the reason we can now stipulate the will in Spain is to be handled in accordance with the UK laws and can leave it all to the Battersea Dog's Home if we want to.

The first Will  I made in Spain was in 1983. I was even then able to make it under the law of UK.  The wording was something like,  “to be administered I  accordance with UK law-“    

So I was able to leave my assets in exactly the same way that I could have  done in UK. 

I made my sole beneficiary was my wife:  I had two children

John, have I missed something here?. The thread is about finner and his tax implications regarding inheritance. As I have already pointed out my earlier post was only a demonstration of how complex things can be. The making of your own WILL in 1983, its wording and your wife and children situation don’t seem very relevant to the OP.

Thanks very much for all your advice. 

I will certainly seek professional assistance in this matter.

Any advice on reputable law firms in Spain who deal with foreigners (i.e. UK, Ireland)? I live in Barcelona.

Finner

Finner:

Did he leave assets in Spain?

Hi @mariadecastro -

No he didn't leave any assets in Spain.

I will basically be recieving a share of what is in his Irish accounts and a share of the house in Ireland. 

Finner

There is no treaty to avoid double imposition on Inheritance taxes between Ireland and Spain. Spain Inheritance Tax Law in article 23, establishes though that you can deduct the lower of the  following two amounts:

a) The effective amount of what was paid abroad as a heir.

b) The amount you would pay in Spain for that  inheritance.

I am in a simular situation, and as far as I am aware, in ireland you are allowed to inherit 350k, and here in catalunya 100k... so if its under 100k, then you wont have to pay tax... You will need to get a lawyer specialiing in inheritence, then they will submit your inheritence forms,..... You may also need to submit a 720 form, if you have land or cash over 50k in your name, in ireland, after the inheritence..

If it is over 350k, then your irish lawyers will withhold the tax (33% i think) until you have paid it in spain.

Hope this helps.. if you have any advance on your situation, please let me know, as currently I am looking for lawyer to do my inheritence, and so far ive got a quote for 600€, just to deal with this!

... you will also need the will and death cert legaly translated... as well as the plan of the house and acerage if aplicable...The law firm i have been recomended to are SANCHEZ MOLINA ABOGADOS in barcelona

@purdyw - thank you very much for the info. 

I will let you know if I find out anything interesting. 

@purdyw - this is what I have found out so far, but also, for anyone else who is in the same situation:

A form called Document 720 (as metioned by @purdyw) is required to be presented by anyone who has  "assets and rights held abroad".

This form needs to be presented between 1 January - 30 March during the following year of recieving an inheritance. So, if you recieve your inheritance sometime this year, 2018, you have to present this form between 1 January - 30 March of next year, 2019. Apparently there are very high penalties if this form is not presented in time. I have been told that there are fines of up to 10,000Euros !!! 

If anyone has any more info it would be great if we could consolidate this information somewhere. 

I have found links to Document 720 in English and Spanish on the agenciatributaria site. I cannot put the full link here but below is the partial URLs

Document 720 (English)

/en_gb/tramitacion/GI34.shtml

Document 720 (Spanish)

/tramitacion/GI34.shtml

Again, if I learn anymore I will post.

Finner:

That tax does not apply to your situation. See an information link on that tax below

https://blog.costaluzlawyers.es/blog/2015/03/05/offshore-assets-tax-declaration-spain/

http://takelegal.com/media/com_acymailing/upload/decalarationforeignassets-taxform720.pdf

Spain Inheritance Tax Law, article 23,  is what applies to your case. You need to declare the value of the inheritance received by you in Ireland and can deduct the lower of the  following two amounts:

a) The effective amount of what was paid abroad as a heir.

b) The amount you would pay in Spain for that inheritance.

If I am correct, that 720 form may eventualy apply to his situation... If he is left cash or property over 50k, then he will need to declare it in his bank account on  the 720 form, correct? Also, if he was left property with another sibling, and the property is worth 60k say,  then he would still need to declare it in form 720, as the property is worth over 50k.

But first the inheritence tax needs to be declared... If the inheritence is under 350k, then the Irish lawyer wont withhold money to pay to revenue.... If its over 350k, then the Irish lawyer will withhold the tax payable in Ireland. In spain 100k is the amount you can inherit from a parent without tax, so if inheritence is between 100-350k, then anything after 100k, tax needs to be paid in spain.

purdy