Inheritances taxes are something that all families will have to deal with. Unfortunately, sooner or later our relatives will die and the taxman will be waiting for us. It is convenient to be informed to try to avoid or minimize these taxes.
There are many controversies about Spanish inheritances taxes. Too many people providing professional Tax opinions and suggesting magical ways (company structures, fictitious mortgages, etc) to avoid inheritance taxes without having the proper qualifications. Taxman is not stupid and you must be careful about these “magical ways to avoid taxes “ which can be at the end a big problem.
I will try to point out in 3 chapters a summary of main answers and clarifications on Spanish Inheritance Taxes. These answers and comments come from inheritances cases and the enquiries and questions I have received from hundred of clients in 10 years of professional experience.
LAWS WHICH RULE INHERITANCE
Everybody must know that Laws which rule the Inheritance and estates are the ones of the nationality of the individual. Should you are Spanish; your inheritance will be rule according the Spanish Law. Should you are British; Laws applicable to your inheritance will be the British ones.
It is in reference to the legal way to distribute your assets, rights of relatives, etc. but not in reference the Inheritance taxes to be paid in Spain. Should you have any assets in Spain (real estate, car, bank account, shares, etc) you would have to pay Inheritances taxes in Spain it does not matter your nationality.
IMPORTANCE OF MAKING SPANISH WILL
Should you are the owner of any assets in Spain (real estate property, bank account, etc), it is recommendable making a Spanish will, despite the fact that making made a will does not affect to the amount of inheritance taxes to be paid nor to the legal rights of your relatives to inherit your assets. Not having a will does not mean that you assets will to the Government but to your relatives. Everybody must know that.
Therefore the main reason for making a Spanish will is to save time, money and worries to your relatives when you passed away. The solicitor of your heirs will also be very happy that you have made a Will because it will facilitate legal inheritance paperwork’s.
Having a Spanish will makes things easier (your wishes are clearly stated in writing and nobody can discuss them avoiding disputes between relatives), cheaper (as there are many expenses when translating documents on states from other countries), and quicker (Inheritance taxes must be paid within 6 months from the date of the death). Spanish wills make easier all Legal & Tax paperwork’s.
Spanish Wills must be signed in front of a Public Notary and the cost of making it is approximately 60 Euros. We recommend everybody doing it.
In next 2 chapters (to be published in next 2 newsletters) we will comment these other issues:
- IMPORTANCE OF TAX RESIDENCE IN SPAIN.
- THERE ARE NO MAGICAL WAYS TO AVOID INHERITANCE TAXES.
- SPECIAL FAMILY CIRCUNSTANCES ( PEOPLE NOT MARRIED, HOMOSEXUAL, PARNERTS, ETC)
- HOW MUCH ARE THE INHERITANCE TAXES ? SCALE OF INHERITANCE RATES IN ANDALUCIA.
- EXAMPLE OF INHERITANCE CASE.
- WHAT YOU MUST DO A PERSON OWNING ANY ASSET IN SPAIN.