Inheritance in Spain. Basic Tips.
It is very important for foreigners who have assets in Spain, to know a few basic concepts about the Spanish process of succession and inheritance. Because, with some simple actions you can simplify the process of your inheritance, save Inheritance Taxes for your heirs, etc.
In Spain, Inheritance Tax is payable by each of the beneficiaries of the estate. And, shall be calculated as per the bond of kinship between the beneficiary and the deceased. Also are relevant for it, the value and type of assets forming part of the estate and the Tax Domicile of the parties, etc. Therefore, in Spain, it is not like other countries where the Inheritance Tax is payable by the estate, but, here it should be paid for each of the heirs, legatees, etc.
It is important in life, before death, to make a list of our assets and have documentation on them, their value, beneficiaries, contact details, etc.
Spanish Inheritance Tax. IHT.
It is also very important to study the different options to help minimize future inheritance taxes for our heirs or beneficiaries. For example, if our heirs are not tax residents in Spain, they will only pay Inheritance Tax (IHT/ISD) in Spain for those assets situated in Spanish territory, which is known as Tax Real Liability. Therefore a considerable amount in Inheritance Tax could be saved if part of your liquid cash or savings are, for example, in the same country where your beneficiary has residence, providing that the Inheritance or Death Duties in that country are more favorable than the Spanish ones.
At this point, we must remember that after the decision of the Court of the Justice of the European Union, of 3 September 2014 on discrimination against non-residents on the Spanish Inheritance Tax, the rules of the Inheritance Tax in Spain have changed, and even if our heirs are not tax residents in Spain, but they are in a member country of the European Union, they may benefit from very substantial reductions and tax benefits, in many cases the same as if they were tax resident in Spain.
It is also highly recommended to grant a Spanish Will, as the inheritance procedures will be much simplified, saving time and money, also you could distribute your assets in an efficient way from a tax point of view, and in a simpler way for the purpose of their administration, etc.
If you want to prepare your inheritance, so your beneficiaries can inherit in a simpler, faster and fiscally efficient manner, or if you are the beneficiary of an estate in Spain, we help you, contact us.
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The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.
Carlos Baos (Lawyer)
Spanish Law firm.
Alicante, Denia, Costa Blanca Marina Alta
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