Thread: Spanish Inheritance Tax (ISD)

The following are all statements that I have heard and all of them are wrong.

'I'll leave everything to the wife and then she is covered'

'My UK Inheritance Tax is sorted so I'm benefiting from the Double Taxation arrangements'

'I'm not a Spanish resident so I'm not affected'

All the statements are wrong. The reply to each is as follows;

- Under the rules of Spanish Inheritance tax a widow will pay tax BEFORE she can take ownership of the 50% that her late husband owned. Until the tax is paid the house is NOT signed over to the widow

- There is NO Double Taxation Treaty or Agreement between the UK and Spain on Inheritance Tax. The two countries have totally different rules and laws so that a Treaty is not possible.

- Spanish non-residents beneficiaries DO pay ISD on property in Spain. If the property was owned by a UK company, the company would not die and shares in the company can pass to beneficiaries under UK rules.

The whole subject is dealt with at length in my blog Financial Pages in Spain: Spanish Inheritance Tax (ISD)

Please email me with any queries

davidgoodall