We prepare Spanish Wills for clients owning property in Spain. Whether you are Non-Resident or Resident, it is important to have a separate Will, prepared and registered in Spain, covering just your Spanish assets. If you do not do this, but simply add your Spanish assets (eg your property) to your Will in your home country, your heirs will incur considerable added expense and delays as the Grant of Probate has to be obtained first in your home country, then all documents have to be officially translated into Spanish, with lawyers involved in both countries.
Will my estate be liable for Inheritance Tax?
Yes it will. Whatever your status (Resident or Non-Resident), your estate in Spain will be subject to Spanish Inheritance Tax upon your death.
In Spain, Inheritance Tax is called Impuesto de Sucesiones y Donaciones (ISD).
In our country there is a main law called Ley Estatal made by the Central Government and that applies in general to the whole country and establishes rates ranging from 7% to 34% of the inherited net values (result after application of corresponding personal allowances) and it is paid by each beneficiary of the Will in relation to the corresponding inherited portion. Since 2001 regional governments have the option of issuing new laws that establish certain benefits for their resident tax payers; some governments as Valencian one have published a Law where the allowances for resident citizens in that Comunidad are higher than the ones observed in Ley Estatal.
In case of a Non Resident deceased person the applicable law to that inheritance case would be always the Ley Estatal which states an allowance per close relative of 15.956,87 €, if it is a descendant under 21 the allowance will be higher.
In general terms, in the “ley estatal” and in the different laws issued by the various Comunidades Autónomas as well other relatives as brothers, uncles, aunts, cousins and nephews will apply lower reductions (exemptions). In general terms when the inheritor is a more distant relative or non-relative (including the non-married partner) there won’t apply any reduction (exemption).
When the Inheritance tax has to be calculated in relation to a deceased person that was residing in Spain, we would have to refer to the law that the corresponding “ Comunidad Autónoma” has issued for its tax payers. In order to be applied the law issued by a regional government (as for instance the Valencian Law) there is a requirement of the deceased being a resident over five years before the date of decease in that particular Comunidad Autónoma. Therefore in the case of a the person that being a resident is deceased but he/she wasn’t there five years counted from the day before decease, the Ley Estatal would apply unless they were residents before in Spain in another Comunidad in which case should be analysed if another regional law could be applied.
As an example the Law of Comunidad Valenciana establishes for the year 2007 a reduction of 40.000€ for close relatives (spouse/descendants/ascendants). In Comunidad Valenciana there has been a new benefit for heirs that are residing in the area as well called “bonificación en la cuota” and consists in taking of the 99% of the payable tax when not only the decease was residing in Comunidad Valenciana but the inheritors are close relatives (spouse/descendants/ascendants) and as well formal residents in the area of that Comunidad.
The Ley Estatal (applicable as minimum to respect for all regional laws)observes a specific reduction when a Spanish Resident is deceased leaving the house that constitutes the main domicile to his/her close relatives and they undertake not to sell for ten years; in those circumstances there is a specific reduction called “reducción por vivienda habitual” where a 95% of the property value could be taken off in the calculation of the net inherited value with a maximum of 122.606,47€.
Therefore to determine the applicable law to the case is the first step and then based on the particular circumstances of the case there could be nuances that would lead to the application or not of certain allowances or reductions.
Inheritance planning is a responsibility we should all undertake. We provide a full service dealing with the probate of Spanish Wills, the administration of the estate of the deceased and all inheritance issues.
Click on the button below, complete the questionnaire and send it back to us (just follow the instructions) – the information you provide will enable us to prepare a first draft of your Spanish Will. The Will is prepared in 2 languages, being Spanish and the language of your choice (eg English), and is signed by you before a Public Notary, after which it is registered in the Wills Registry of Spain (Registro Central de Últimas Voluntades) which is held in Madrid. Upon receipt of your completed questionnaire we will let you know how to proceed for the witnessing of your Will, and we will book and confirm to you the Notary appointment to take place during your next visit to Spain.
If you would like to know approximately how much your heirs would have to pay in Inheritance Taxes, please let us know and our Legal Department will prepare an example for you based on the assets you own at the moment. The assets will include any money that you have in Spanish bank accounts or any other kind of assets or investments held in Spain, so please ensure you detail these. We will send you the assessment together with your draft Will.
