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Carl James Associates Advice on Spanish Inheritance Tax

Carl James Associates Inheritance Tax Advice

Carl James Associates Advice on Spanish Inheritance Tax


IHT is paid in Spain by the heirs who inherit the Spanish assets and each heir will have a personal allowance based on their relationship with the deceased and their pre-existing wealth. A son, daughter or wife, would pay less IHT than a cousin or aunt inheriting Spanish assets. The IHT rates across the 17 autonomous regions vary greatly. For example in Andalucia a son inheriting assets from a deceased parent with no pre-existing wealth will have a personal allowance of 1 million euros. In the Balearic Islands, the son would only pay 1% of the value of the asset inherited. It is expected that these discounts and allowances will initially disappear in the event of a non Brexit deal and allowances will be similar to non EU nationals which for children and spouses is 15957 euros.

Carl James Associates say initially disappear as Spain has various legal fronts open against it for treating EU and Non EU Nationals discriminately when it comes to IHT. It is likely that a Court, in due course, may find Spain to be behaving discriminately in relation to this tax and order them to apply the same rates to EU and Non EU nationals which would be welcome news for British heirs of Spanish assets.

In addition to the taxes set out above, Carl James Associates expect Spain may insist that Brits living in Spain renew their residency on an annual basis and the requirements for residency may become more onerous. The requirements may also become stricter when applying for a Spanish tax number as a foreigner (NIE) or opening a bank account. It will be interesting to see if a Court Judgement obtained from a UK Court for example ordering the sale of a Spanish property in divorce proceedings, will still be relatively straight forward to enforce in Spain post Brexit as it is now.

Healthcare and cover is of concern to Brits visiting and living in Spain. Those visiting Spain for their holidays are best advised to have travel insurance in place that provides medical assistance and repatriation in the event of an accident. Those living in Spain now should register with Social Security before 29 March 2019 or put in place private medical cover.

If you have decided to move to Spain, then you will be joining hundreds of thousands of British owners of Spanish property who enjoy their new lives in Spain. Post Brexit there will be some changes but in our opinion and, speaking with experience as someone who moved to Spain when Spain was not a member of the EU, these changes will be minimal and should not put you off your dream of either owing a Spanish property or living in Spain.

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