How does Spanish inheritance tax differ from the UK?

Inheritance is never a topic that people want to dwell on. But if you’re spending your retirement years in a country that is not your native home, as a resident or as a non-resident, we strongly recommend you spend some time planning out how your assets will be distributed in the form of a will. You’ll thank us later!

If only all inheritance laws were the same, it would be so much easier, right? Unfortunately, this is not the case, and Spanish laws can differ quite significantly to the UK equivalent, which is also true when it comes to inheritance tax.

This is the amount paid by your beneficiaries on the money or assets that they inherit from someone who has died. This can often be large sums of money, so it is worth finding out the differences before you start planning.

Luckily, you have come to the right place with this Manzanares Lawyers blog!

Do my beneficiaries have to pay inheritance tax in Spain?

If you are from the UK (or any other country), and you own property or other assets in Spain, then you may want to take a closer look at exactly how inheritance tax works. You then know how much of your assets and possessions your nearest and dearest will inherit from you once you pass away.

In the UK, all assets that are left for your children or surviving spouse are free from inheritance tax, but in Spain, this is not the case. All beneficiaries are liable to inheritance tax – so it is worth keeping this in mind when writing your will and distributing your assets.

If you would like a comprehensive overview of how Spanish inheritance tax could affect your loved ones, then be sure to contact the professional team at Manzanares Lawyers today.

spanish law regarding inheritance

What about my children?

In the UK, you can decide in your will how much of your inheritance is left to your children, but this differs in Spain. If you don’t insert a clause in your will stating that you want your inheritance to be distributed in accordance with UK law, then you may have to comply with Spanish inheritance tax rules if you had the last residency in Spain. This means that two thirds of your possessions must legally (it is not automatic) be transferred to your children as they are the “legal forced beneficiaries”.

The amount of inheritance tax that children have to pay ranges from area to area, so it is worth looking into these individually depending on where you reside.

Inheritance tax in Andalucía

Is it any wonder that the beautiful region of Andalucía is popular with people who are looking to spend their retirement years in style? As well as the gorgeous weather and endless things to do, it also offers one of the best inheritance tax deals in Spain.

As inheritance tax laws change slightly on a region by region basis here in Spain (adding to their complicated nature), Valencia has always been considered one of the fairest deals, but now Andalucía could be the most tax friendly place to spend your later years.

From April 2020, if you are a child or a spouse that is inheriting from someone with property in Andalucía, you will not have to pay any amount if you receive up to €1,000,000 from your inheritors. That’s right, if you are a beneficiary you now receive up to €1,000,000 tax free from your parent or spouse. When planning your will, this knowledge can prove hugely important in securing the future of your loved ones.

If you would like to find out about how inheritance law in Spain – specifically Andalucía – applies to you, then please don’t hesitate to get in touch with one of our lawyers in Marbella.

Contact us for support

If you feel you could benefit from an expert opinion regarding inheritance tax in Spain, then be sure to contact the team from Manzanares Lawyers today! For over 20 years we have been assisting clients in making the best choices for them in terms of Spanish law.

To contact our Marbella office, make sure you use +34 952 82 41 12 to get in touch with us via telephone, or use +34 952 59 50 42 for our Alhaurin office.

For any detailed enquires you can also email us at clientservices@manzanareslawyers.com or fill out our online form for a FREE consultation with one of our team.

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