Inheriting Spanish Property

Information and questions about the Law in Spain and Andalucia.
Lavanda
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Inheriting Spanish Property

Postby Lavanda » Tue Jun 18, 2024 3:41 pm

I understand that it is normal to pay the inheritance tax before one can claim an inheritance in Spain. What happens when a person does not pay the inheritance tax? Presumably, they do not get the inheritance? What happens to it next? Who gets the inheritance?

Manchesteral
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Re: Inheriting Spanish Property

Postby Manchesteral » Wed Jun 19, 2024 1:46 pm

I believe you have to pay the taxes within six months, I don't know what happens if you don't pay! A friend of mine inherited an apartment in Las Palmas a couple of years ago and he had to pay the taxes upfront before they would release the property to him, luckily he had the money!

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gerryh
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Re: Inheriting Spanish Property

Postby gerryh » Wed Jun 19, 2024 3:45 pm

Perhaps it happens that the person can't pay the taxes, so the property can't be inherited or sod.
So it stands idle and gradually deteriorates which might explain why some properties fall into ruin and are abandoned.
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Re: Inheriting Spanish Property

Postby El Cid » Wed Jun 19, 2024 4:07 pm

I think that if you renounce your inheritance it get passed to the other heirs. If there are no relatives it passes to the state. It’s a very complicated situation and definitely needs legal advice.

There is also the problem of debts. The inheritance may include debts which you are disinclined to inherit. It’s very different from the UK where the assets of the deceased become his estate. Any debts would be settled from the estate including IHT before it gets paid out to the beneficiaries who get to keep what they get.

To go back to Gerry’s point about derelict properties, this is mainly caused by the Spanish forced heirship rules where the property gets left to multiple children who neither want their small share of the property or cannot agree how to dispose of it. As a result it just gets abandoned although it is legally owned.

This problem is sometimes apparent with land where it has been subdivided so many times over the generations that the plots are tiny and useless in their own right.

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Re: Inheriting Spanish Property

Postby ashtondav » Thu Jun 20, 2024 1:42 pm

Manchesteral wrote: Wed Jun 19, 2024 1:46 pm I believe you have to pay the taxes within six months, I don't know what happens if you don't pay! A friend of mine inherited an apartment in Las Palmas a couple of years ago and he had to pay the taxes upfront before they would release the property to him, luckily he had the money!
If you want avoid interest charges inheritance tax in the uk has to be paid within 6 months of the death. Also probate will not be granted unless IHT is paid. Very similar to Spain?

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Wicksey
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Re: Inheriting Spanish Property

Postby Wicksey » Thu Jun 20, 2024 4:20 pm

ashtondav wrote: Thu Jun 20, 2024 1:42 pm
Manchesteral wrote: Wed Jun 19, 2024 1:46 pm I believe you have to pay the taxes within six months, I don't know what happens if you don't pay! A friend of mine inherited an apartment in Las Palmas a couple of years ago and he had to pay the taxes upfront before they would release the property to him, luckily he had the money!
If you want avoid interest charges inheritance tax in the uk has to be paid within 6 months of the death. Also probate will not be granted unless IHT is paid. Very similar to Spain?
Only something like 4% of people have to pay UK inheritance tax, but it seems to be a lot more here as anyone who is not a spouse seems to have to pay it if I'm correct? The UK allowance can be as much as a million pounds if it is a couple and both owned the house. We are going through all this at the mo with two family members but there is no IHT to pay thankfully (not that it is speeding things up :crazy: ).

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Re: Inheriting Spanish Property

Postby El Cid » Thu Jun 20, 2024 5:10 pm

In Andalucia IHT allowances are very high. Children, parents and spouses get €1million each. The same applies to gift tax.

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Wicksey
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Re: Inheriting Spanish Property

Postby Wicksey » Thu Jun 20, 2024 9:03 pm

I knew it was generous here, but if you're not married to your partner then it's different. I've known of a couple of people who have had to pay an awful lot when their partner died and they inherited the house.

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Re: Inheriting Spanish Property

Postby Pamela1 » Fri Jun 21, 2024 8:02 pm

Wicksey wrote: Thu Jun 20, 2024 9:03 pm I knew it was generous here, but if you're not married to your partner then it's different. I've known of a couple of people who have had to pay an awful lot when their partner died and they inherited the house.
Very true......My husband who is Spanish...his father passed over 18mnths ag at 97,he died with nothing..Still ongoing...I will sell before my family have the nightmare of Spanish bureaucracy.

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Re: Inheriting Spanish Property

Postby El Cid » Fri Jun 21, 2024 8:43 pm

Wicksey wrote: Thu Jun 20, 2024 9:03 pm I knew it was generous here, but if you're not married to your partner then it's different.
It’s also a big problem if you have step-children. They are not treated as close family so the special allowance does not apply and to add insult to injury, the tax is doubled ( can be over 80%). Adopted children are fine but Spanish law clearly does not reward remarriage.

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Re: Inheriting Spanish Property

Postby Free at Last » Sat Jun 22, 2024 8:34 am

El Cid wrote: Fri Jun 21, 2024 8:43 pm

It’s also a big problem if you have step-children. They are not treated as close family so the special allowance does not apply and to add insult to injury, the tax is doubled ( can be over 80%). Adopted children are fine but Spanish law clearly does not reward remarriage.

Sid
Stepchildren are included in Group III beneficiaries as they are classed as "descendientes por afinidad". As such, the multiplier is 1.568 for inheritances up to just over €400k and 1.66 for inheritances between that and €2M. The doubling of tax is for Group IV.

https://www.inheritingspanishassets.com ... x-charges/

https://elpais.com/economia/2017/08/04/ ... 60066.html

They are still in a far worse position than natural or adopted children, though, as are siblings. As a childless person, if my husband were to die before me my brother would then be my only beneficiary. The thought of him having to pay so much tax would be the only thing that could ever make me think of returning to the UK in later life.
Last edited by Free at Last on Sat Jun 22, 2024 8:44 am, edited 2 times in total.


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