Page 47 - Property Portfolio - July 2019

Spanish succession and gift tax UK inheritance tax
Inheritance tax in Spain works very differently Many British expatriates remain liable to UK
to UK inheritance tax. Tax is paid by each inheritance tax since it is based on domicile
recipient, not the estate, and tax rate varies rather than residence. This means your estate
depending on the relationship between the could be liable to both UK and Spanish
Estate planning for UK person passing the money and the person inheritance taxes, but a credit is given in Spain

for the tax paid in the UK to avoid double
receiving the money. There is no blanket spouse
to spouse exemption. taxation.
nationals in Spain The state succession and gift tax rates start at Succession planning

7.65% and rise to 34%. Multipliers based on the The first step is to establish your goals. Who
familial relationship and beneficiary’s net worth would you like to benefit from your estate? Do
can take tax rates much higher. you want to control how and when they receive
their inheritance? How quickly would they need
There are some reductions and allowances to access the money? What can you do to make
but they are low. Spouses, descendants and the inheritance process as easy and cost-effective
ascendants only receive a reduction of €15,957; as possible for them?
it is lower (or nil) for everyone else. Also, there
is a 95% reduction against the inherited value Then seek specialist cross-border advice on how
of the main home, but only for spouses or you can achieve your wishes for your heirs, at
descendants who keep the property for at least the same time as keeping inheritance taxes as
10 years. This deduction is capped at €122,606 low as possible. Depending on your family
per inheritor. situation, estate planning for Spain and the
UK can get rather complex, but with careful
However, the autonomous communities can planning you can get peace of mind that you
adjust the tax rates, allowances and reductions have the most suitable approach in place, for
to make them more beneficial for residents in yourself and your family.
the different Spanish regions. Andalucía, for
example, this year introduced an additional 99% Tax rates, scope and reliefs may change. Any
tax relief for Group I and II beneficiaries. statements concerning taxation are based upon
our understanding of current taxation laws
Spanish succession and gift tax is due if the asset and practices which are subject to change. Tax
being inherited or gifted is located in Spain information has been summarised; an individual is
(regardless of where the recipient lives), or if the advised to seek personalised advice.
recipient is resident in Spain (regardless of where
the assets are located).

Keep up to date on the financial issues that may affect you
on the Blevins Franks news page at www.blevinsfranks.com

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