Welcome to our section on the Spanish inheritance tax for UK expats, wills and inheritance law. In this section, you will find useful information on the Spanish and international inheritance and the treatment of legacy without a last will.
When a person dies, whether or not in Spain, the legacy open and serve all the property to be transferred to the heirs. Below describes our team of specialists step by step what is going to happen to the legacy in Spain. Some essentialële questions are answered such as:
What is a Spanish testament and when is this interesting?
How is the inheritance tax in Spain calculated?
What rules apply to my inheritance?
Step I. Identify the belongings of the deceased
All property of the dead is mapped and localised, including real estate, bank accounts, stocks, life insurance, cars, etc. This will written document is not only crucial for the transfer of the estate, but also to the applicant to pay inheritance tax.
Tip: If you live permanently in Spain for your heirs, then make a list of your possessions in Spain.
Step II. What rules apply to the estate? Spanish inheritance or the Belgian or Dutch law of succession?
For 2012 determined the Spanish law that the country of the nationality of the testator the transfer of the estate settled. The removal of a Spanish property of, for example, a Brit was then controlled by the British inheritance law. However, this caused difficulties, since the constitution of the United Kingdom stated the Spanish inheritance applicable as far as the possessions in Spain stood.
But why is to determine the applicable law so important? Each country has its inheritance, with differences and similarities. Just as Spain has a system of the Belgian law of succession forced heirs, allowing you, for example, the children not only can disinherit. With the upcoming change of the Belgian law of succession, that basically will give more freedom to the testator, it may in some situations be useful to ensure that the Belgian inheritance applies to your Spanish possessions.
The Spain Parliament after August 2015 has passed a law to avoid these problems. You will now have two options in Spain:
1) you choose the applicable statute of succession in your will;
2) when you no choice, the applicable law of succession determined by your permanent place of residence during the last five years.
If your permanent residence is not established, for example, because in Spain regularly overwinters, looked at the country where you the most influential band.
Step III. Is there a will? Is there a Spanish will?
In the third step, it is checked whether the testator has drawn up a will. It is entirely possible that you have multiple wills has a testament of the home country and a Spanish testament.
A. There is a Spanish testament
The estate in Spain can be divided. Please note that a Spanish proof is only valid if it was registered in the Registro Central de Ultima introduce Voluntad. In practice, there is a problem. If you are in your Spanish testament opts to apply foreign law of succession, the heir to this dispute for the Spanish Court. The Spanish Court then assesses the validity of the will by the law of the nationality of the deceased. To prevent this, the editors of your will by specialists necessary.
B. There is only a testament to the country of your nationality
You will first need the will to be officially translated into Spanish. This is already more expensive than in the drawing up of a Spanish testament! Also, the heirs the death certificate, the birth certificate and, where appropriate, the data of the civil status and to translate. Possibly should also be a local administrator of the estate appointed. The whole procedure can take some months. This is problematic since the inheritance tax must be paid within six months of death.
C. There is no testament
In this case, Spanish law of succession apply if the permanent residence of the deceased stood in Spain, and this on his entire estate, so both Spanish and non-Spanish possessions.
How is a testament settled in Spain?
Accepting a legacy happens for the Spanish notary. The heirs (or representatives) Act the Escritura of, this is a description of all assets and liabilities in the estate, the rank and the distribution of assets among the heirs and the formal acceptance. Finally, the new title deeds of immovable property registered in the land registry.
Step IV. Calculation of the Spanish inheritance tax
The Spanish inheritance tax is extraordinarily complex and is partially on a national level and partly at the regional level. Independently of the applicable law of succession, the Spanish inheritance tax applies to all property located in Spain (unless the goods are held by a company). Note that the heirs do not have the legacy can have to the inheritance tax that they have paid.
The Spanish inheritance tax is calculated by the heir and not on the estate itself. There are, however, various reductions, exemptions and rates of application that partly depend on the region. The total to pay inheritance tax can, therefore, be reduced with many techniques. Tax planning is so recommended to the Spanish to avoid inheritance tax.
Spanish inheritance tax for residents and non-residents
For 2015 were residents and non-residents unequal treatment by the Spanish inheritance tax. The European Court of Justice has sentenced to Spain. After 2015, the Spanish legislature the inheritance tax adjusted so that there is equal treatment and also non-residents can enjoy tax reductions. Also, there is a right to a refund of the overpaid fee for legacies before 2015.
How is the tax explicitly calculated?
The rate is situated between 7.65% and 34%. However, there are several reductions possible:
– the descendants under 21 years have a right to a cut from 15,956.87 euros to 47,858.59 euros, depending on age;
– the heirs in straight line, first degree (children and parents) older than 21 and the surviving spouse are entitled to a reduction from 15,986.87 euro;
– other family members are entitled to a reduction from 7,993.46 euros.
These are minimum reductions. Each region can increase the cut.
In the region of Valencia
– The descendants under 21 years have a right to a reduction from 100,000 euros to 156,000 euros depending on the age and an additional decrease of 75% on the applicable rate;
– The heirs in straight line, first degree (children and parents) older than 21 and the surviving spouse are entitled to a reduction of euro 100,000 euro and an additional reduction of 50% on the applicable rate.
In the case of permanent residence in Valencia will be the taxable base of the family house be reduced by 95% with a maximum reduction of 150,000 euro provided that:
– the heirs in the first degree and the surviving spouse aged over 65 years and two years before the death were living with the deceased;
– the property for five years before the death was used as the family home.
In the Murcia region
The first degree descendants under 21 years old are entitled to a reduction of the tax rate of 99% on the family house. The same goes for descendants older than 21 and the surviving spouse, but then apply reductions of 60% on the tax rate.
In the region of Andalucia:
In Andalucia is the taxable base of the family home reduced by 99.99% in case of permanent residency in Spain. Also, there is a tax reduction amounting to 175,000 euro for the heirs in straight line, the first degree (children and parents) and the surviving spouse.
Step V. Operation of the Spanish inheritance
The text below discusses the Spanish legacy by and large.
In General be the surviving spouse is entitled to half of the assets acquired during the marriage. The other half of the power goes to the estate. Besides, the surviving spouse entitled to an annuity (usufruct vitalicio), to the extent of one-third of the property in the estate, provided that full ownership to the children. The children, however, only have access to this third if the surviving spouse also dies.
Another third of the estate is divided among the children. The last third can distribute at will, the testator whether or not about the children. If there are no children, the parents of the deceased at least entitled to a third. Also, the surviving spouse has at least entitled to a third.
Know that the Division of the inheritance should be completed within six months of death, under penalty of payment of fines on top of the inheritance tax.
A Spanish testament must meet some formal conditions and should be put up for the notary (testament Abierto). The notary retains its version and sends a copy to the Registro Central de Voluntades Ultima. Also, a secret testament is possible (testament cerrado). In that case the notary no access to the will.
Finally: when formatting a Spanish testament is essential to report that it relates solely to power in Spain explicitly. The testament of your homeland, the applicability of the Spanish power to expressly exclude.
Is it obligatory to make a Spanish will?
No. However, it is recommended that to facilitate the handling of the estate.
Why a Spanish last will and testament facilitates the handling of the estate?
This enables you to choose the applicable law of succession.
You avoid the most significant part of the practical burden in the handling of the estate; the procedure will be simpler and faster. Also, the system will be considerably cheaper with a Spanish testament than without.
Conclusion: not required, but recommended to a Spanish format will.
Choose the applicable law of succession.
Limit the applicability of the Spanish testament to assets located in Spain.