OTHER FINANCIAL MATTERS

Wills

It is advisable to make a separate Spanish will dealing exclusively with your Spanish assets to prevent your heirs from becoming involved in time-consuming and expensive legal procedures in the event of your death.

Furthermore, it is the only way of avoiding the application of Spanish inheritance rules, which stipulate how a person’s estate must be distributed, regardless of their wishes.

If you decide not to prepare a Spanish will and have an existing will in the UK, your Spanish assets may be covered. However, the procedure to have your UK will enforced through the Spanish system is not only lengthy and expensive but, more importantly, subject to the Court’s discretion.

Conveyancers can assist you in the preparation of your Spanish will and will accompany you to the offices of the Spanish Notary, before whom the will must be signed for validity. Your will is then registered with the Spanish Registrar of Wills in Madrid where it will remain until your death.

Inheritance Tax

Your estate will be subject to Spanish Inheritance Tax if you die while owning property in Spain.

Inheritance Tax is a very complicated business in Spain and the rate depends on both the proximity of relationship between the testator and beneficiary, as well as the amount being bequeathed.

Tax-free allowances are given to certain beneficiaries, with close relatives receiving higher allowances. The standard allowance is approximately 16,000 Euros, unless minor children are inheriting and the allowance is more.

You should bear in mind that a bequest to non-relatives attracts considerably higher levels of inheritance tax in Spain, as people are encouraged to leave their property to family members. This is especially important to bear in mind if you are an unmarried couple.

The Andalucia province has recently modified this somewhat harsh law so that providing non-married couples register with the appropriate authorities, they can enjoy the same exemptions as married couples.