More inheritance tax questions

[irismary]

I have read the the previous answers on this topic, and posted at the end, but now a bit down the list, so sorry if I upset anyone by reposting!

It seems that if I were to inherit a share of a property plus cash assets in UK, from a UK parent that do not exceed 175,000 euros in total, it would that mean that in Andalucia I would pay no inheritance tax? Would I still have to fill in the appropriate forms for Hacienda? Or would it just mean waiting for the next date to file the assets in Modelo 720 ?

And how would the Spanish value a house in UK? Would it be market value or some other figure? e.g. rateable value. And what would happen if after probate was granted I passed my share of the property to a sibling (who would eventually inherit from me anyway) ? Need to do a bit of planning!

And does anyone know what, if any, paperwork one would need from UK to confirm part ownership of property and the value of any other assets/cash inherited..

Perhaps Beach or El Cid could throw some light on the subject. Thanks

[El Cid]

You are correct about the 175k allowance, but you must have been a resident of Andalucia for 5 years to get it.

Sorry, but I have no idea what paperwork is needed as I have never been involved in any IHT.

The value of the property for wealth tax purposes is the same as it is on the Form 720 - they use the purchase price unless a value has been more recently agreed for legal purposes. I assume that might refer to the probate valuation so it could be that that would be used for IHT - you need to get some expert advice on this.

As far as I know, you can avoid Spanish IHT by not accepting the inheritance, but whether your sibling would automatically get it instead would depend on the will. If you want to give it to him I assume you could only do that if you accepted the inheritance first and that could mean paying the tax.

Sorry I can't be more help on this. I'm pretty good on the numbers but not on the paperwork!

Sid

[elusive]

Can I just add to this. this is prob a daft question but i take it you only get one allowance of €175k. its not like you get one allowance one year and five years later you get an another inheritance. and if you die a day before your fifth anniversary you or should i say your family in spain are buggered.

[El Cid]

It's a good question. As far as I can see, it is one allowance per inheritance and it is not time limited.

However, one of the conditions of getting the allowance is that the personal wealth of the recipient must be less than €402k, so that will probably be a limiting factor if you keep inheriting large amounts.

Sid

[elusive]

thanks sid. not such a daft question then! we will be looking at sorting out wills in the near future so its another question to add to my list when we see the gestor

[irismary]

Thanks Sid. I will have to speak to our solicitor, but needed info and a heads up before deciding what to do when this problem rears its head. It seems to me that solicitors here often seem to interpret the law in a rather freehand fashion!

[Chica56]

How do they decide you have been a resident of Andalucia for 5 years? By your tax returns? By registering at the Foreigners Office?

I thought the 175000 euros was only from a spouse or registered partner and that inheritances from parents or other relatives do attract IHT according to a sliding scale according to degrees of blood relationship?

[El Cid]

Your residency will decided from your tax returns as you have to state which region you live in.

The 175k allowance applies to group 1 and 2 relatives. That is children, grand children, great great grandchildren etc. parents, grandparents etc and spouses and registered partners. Adopted children are included but not step children who are in Group 3 along with brothers, sisters,cousins, nephews and nieces, aunts and uncles.

Sid

[Chica56]

Thank you Sid that was a very fast and clear answer