Thread: Inheritance Tax - everyone should read

I received an email from an English lady who owns a second home in Spain. After the death of her husband she was shocked to get a bill for Spanish Inheritance Tax.

My blog has more detail. I hope you will read it and pass it on to all your contacts, whether Spanish resident or property owners.

DJ

I have to admit that my only worry about this tax,is the survivng spouse. If we both die at the same time, then whoever gets the house(if they want it) can pay the tax, which will be far below the actual value of the place

The surviving spouse is one of the big differences between the UK and Spanish versions. The story in my blog shows how many British people in Spain 'assume' that the systems are similar.

Personally, I think all potential beneficiaries should know the situation because the tax has to be paid within six months.

what happens if the person defaults on the tax? Doesn't really affect me or my wife as we have set aside funds for just such an occassion

The tax authorities will seize the assets!

Well they can do that, but they normally negotiate an agreed payment route.

I think if you choose to leave your house to someone, it would only fair to tell them and warn about tax implications, or have the tax paid from the estate.

Originally Posted by dunmovin

I think if you choose to leave your house to someone, it would only fair to tell them and warn about tax implications, or have the tax paid from the estate.

The tax cannot be paid from the Estate, and you cannot borrow against a property which is not yet yours either.

then a part of the estate set, aside strictly for this purpose and payable only when the estate is settled

A spanish person told me that many locals ignore this tax.......I'm told if its not paid in 7 years its no longer due.......illegal for sure but evidently an approach locals use.