Inheritance Tax - the Voluntary Tax
We are all in pretty much agreement that Inheritance Tax ( I.H.T.) is high
in the U.K but it is even worse here in Spain!
Over the last decade, property values in Spain have increased significantly
and there are a high number of expatriates who own their Spanish properties
outright, thus giving them a Spanish asset of considerable value.
In contrast to the U.K. or the U.S. systems, Spanish I.H.T. does not tax
the estate of the deceased, but taxes the real value of the portion received
(i.e. property) by each heir.
There is NO EXEMPTION BETWEEN HUSBAND AND WIFE, therefore with the death
of the first, the value of the property is divided in two.
On a property value of €500,000, the tax due would be €43,000
and this must be paid before selling the property. (The survivor is likely
to benefit from a small allowance as beneficiary of €16,000)
When the surviving spouse dies, I.H.T. is again payable and this time on
the whole 100% of the value of the home, this must be paid before selling
the property. This translates into a further €116,000 I.H.T. to pay.
Subsequently a total I.H.T. bill of €159,000 – over 40% of the
Q. Do you own your Spanish property?
Q. Do you want your family to inherit your Spanish Estate?
Q. Would you like supplementary income?
Q. Do you want to mitigate Spanish Inheritance Tax?
If you are nodding your head to these questions then you would find a meeting
with a fully qualified independent financial advisor extremely beneficial.
Janet Knight (a senior consultant with Offshore Investment Brokers) states “Many
of my clients know friends or family who have died in Spain, leaving their
spouse and heirs an horrific tax bill. Usually they are unaware of the large
amounts involved and are mistakenly under the impression that the property
can be sold to pay the I.H.T. due.
The death of a spouse is devastating enough without the added burden and
pressure of paying taxes. (Penalties will be applied if the tax is not paid
within six months). There are ways to mitigate the Inheritance Tax problem
which many of my clients have found invaluable – forewarned is forearmed!”
Knight (M.L.I.A..dip, FAIQ II) is an independent financial advisor with
Offshore Investment brokers, accredited by the Chartered Insurance Institute
For more information on Inheritance Tax Planning and other financial
advice, tel. Janet Knight on 639 067 704 or 952 798 002
or email her on firstname.lastname@example.org