Spanish Inheritance Tax

[Mike]

My wife and I are British nationals, resident in Spain, in Andalusia, Malaga province.

We own a house here and I understand that on death our estate in Spain will be subject to local inheritance tax.

My question is, if we also have (say) property or investments in England, will these assets be subject to Spanish or English inheritance tax  on death ?

Mike.

[Mark Stücklin]

Hi Mike,

Read this article on the subject by Raymundo Larraín, it should answer your question:

+ Spanish Wills and Probate Law In Light Of European Regulation

I will also try and get a short answer for you.

[Mike]

Mark,

I know about the change in the Spanish law as of 15th. August 2015, and we changed our wills earlier this year accordingly, so that our wills are now governed by English law on first and second deaths.

But this has nothing to do with Spanish Inheritance Tax, so my original question still stands, and I would be much obliged if you can get a legal opinion on the matter .

Mike.

 

[Mark Stücklin]

This response from Raymundo Larraín:

Short answer: on being resident in Spain, Spanish Inheritance Tax is paid on all worldwide assets.

However there is no double taxation treaty in force with the UK specifically regarding IHT.

The query does not specify whether the beneficiary is resident or non-resident.

a.- A resident beneficiary may have to pay some inheritance tax in England on top of the IHT paid in Spain (double taxation). The Spanish tax would not be deductible in the UK (as there is no double taxation treaty on this matter with the UK).

b.- A non-resident beneficiary will not pay IHT in Spain for assets held abroad (i.e. in UK); they will pay IHT only in the UK for assets located there. They will however pay Spanish Inheritance tax on the assets located in Spain, as is natural.

Both resident and nonresident beneficiaries alike may benefit from lenient regional tax allowances depending on where (which region) the assets are located in Spain. More on this here:

Changes to Spain’s Inheritance and Gift Tax Law

[Mike]

Mark,

the beneficiaries (2) , one is resident in the  U.K./London and the other is resident in Hong Kong.

Mike.

[Author]

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