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You may not realise this but Inheritance Tax in Spain is a much worse deal than Inheritance Tax in the UK. |
There is no tax free inheritance from spouse to spouse, instead when you die your share of your estate is assessed by the Spanish taxman for inheritance tax and the post-tax value is added to the survivor’s estate, the tax owing lies as a debt until you sell the property or you die yourself and your share (including what you inherited from your spouse which if you remember had already been taxed once) is subjected to inheritance tax.
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Property Value €-Euros |
Inheritance Tax
Liability for a couple with two offspring beneficiaries |
Cost of Our Spanish Inheritance Tax Scheme |
The saving made against Spanish Inheritance Tax at today’s values |
The saving made if the property doubles in value before death |
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€200,000 |
€29,514 |
£5,000 |
€24,514 |
€79,749 |
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€300,000 |
€54,832 |
£5,000 |
€49,832 |
€147,390 |
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€400,000 |
€84,749 |
£5,000 |
€79,749 |
€223,890 |
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€500,000 |
€116,624 |
£5,000 |
€111,624 |
€313,064 |
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€750,000 |
€209,765 |
£5,000 |
€204,765 |
€536,189 |
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€1,000,000 |
€318,064 |
£5,000 |
€313,064 |
€783,091 |
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€1,500,000 |
€541,189 |
£5,000 |
€536,189 |
€1,293,091 |
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€2,000,000 |
€788,091 |
£5,000 |
€783,091 |
€1,803,091 |
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Next: in the UK you have a £312,000 allowance to offset against inheritance tax, so £624,000 for a married couple – but in Spain it is just €15,957… which is peanuts really!
Thirdly: when you die the inheritance tax has to be paid in full within six months of your death before your beneficiaries can inherit your estate. If you are late paying then there are penalties applied as there are if your estate doesn’t have the money to make the payment and your property has to be sold – now how long would your property take to sell at the moment I wonder…….?
Fourth: well, your Spanish property is part of your worldwide estate for UK taxation purposes and as you are likely to be UK Tax Domiciled even though you might be resident in Spain your villa will be assessed for inheritance tax in the UK after your death; then, as often happens, another tax bill for your estate to settle may be the result if your worldwide estate exceeds your two UK nil rate bands.
So it is very important that you provide yourself with protection against Spanish Inheritance Tax, it is just one of the things you have to do otherwise the value of your legacy to your beneficiaries will take a hammering, look at the figures in the table above!
Fortunately there are ways to protect your Spanish property from this insidious tax. The one we offer through our wealth protection specialists does not involve a mortgage or the investment of your property’s value in what today are very risky investment bonds which cost a fortune to run.
Just CLICK HERE to access our enquiry form, tell us how much your property is worth and submit your enquiry and you will be contacted by our wealth protection specialist who will be pleased to assist you. | |
