PLEASE NOTE: on the 3rd of September 2014, the European Courts rules against Spain for Descrimination between Residents and Non Residents in matter of Inheritance and Gift Tax, compelling Spain to modify their legislation so that everyone is charged at the same rate. This means that if you have received an inheritance or gift and paid tax on it in Spain in the last 4 years and are Non Resident, then you are due a REBATE! We are currently working on this matter for our clients, therefore if you or anyone you know is affected by this change in the law, please do not hesitate to contact this office.
We are able to deal with Inheritance and Probate in either Spain or the United Kingdom. Probate is complicated in either country, contact us for more information. Don’t get caught out.
Living and growing old together under the sun can be a wonderful prospect, however it is a fact of life that the day will arrive when you will have to deal with a probate. Probates are always complicated, be they in Spain or in England, however in Spain the language barrier can cause a big problem. Your lawyer will be able to guide you through this process.
For a Probate the following is needed:
The Death Certificate. The most important document. This can be applied for from the Civil Registry of the deceased’s place of residence. With a copy of the death certificate you can apply to the “Registro de Ultimas Voluntades” (The Last Wills Registry) in Madrid, for a certificate stating if the deceased held a will in Spain at the time of death and in which Notary it is held. (Having a will makes Probate so much easier, without one it can turn into a nightmare taking months or years to sort out).
A list of all assets (property, business, cars, boats, etc.) and the relevant documents to prove their existance and value.
Bank certificates for all bank accounts stating the funds held in the accounts at the time of death.
Documents for any debts (Mortgages, personal loans, etc.)
Any life insurance policies
Any bills for care during illness and the funeral costs can be deducted from the inheritance.
To ensure that you have all the correct documents, check with your lawyer.
All heirs must have an N.I.E number (see section on NIEs) and must come to Spain to accept the inheritance, this is done before a Notary Public. The Notary charges for the Adjudication and Acceptance of Inheritance Deed.
The Inheritance Tax must be paid within six months of the date of death. There are cases whereby the heirs have waited for four years for the payment period to expire, meaning that they paid no inheritance tax. This practice is at best risky. The payment period infact expires at 4 years and six months. After the initial six months the surcharges are applicable starting at 5% and working its way up to 100%, which means that should the tax authorities claim the tax you may be liable for double the initial amount.
Inheritance Tax: (PLEASE NOTE CHANGES ARE DUE!!)
The Succession and Gift Tax Law changed recently in the Valencian Community (comprising of Alicante, Valencia and Castellón), whereby there is now a reduction of 100,000€ (for direct relatives) on the total amount of the inheritance, per person, unless your are lucky enough to be under twenty one years of age, where the exemption is up to 156,000€ of age. There are also further reductions for people with disabilities.
Should both the deceased and the heir be resident in the Valencian Community, on the remaining amount the deductions are 95%, up to 150,000€ if the house was the deceased’s home, for this deduction to be applicable the heir may not sell it within the following five years of inheriting. And a further 75% deduction for direct relatives (children, spouses or parents).
Non residents will get a initial deduction of 15.956,87€ for direct relatives, but unfortunately there are no other deductions available at this time.
The tax discrimination between Residents and Non Resident Succesion Tax has been put to the European Parliment and this seems to have prospered which means that we are now in the position to reclaim overpaid inheritance tax paid by non residents. Contact us for more information.
Gift Tax; (PLEASE NOTE CHANGES ARE DUE!!)
In the new Succesion Tax Law the cap on Gift Tax is now 150,000€.