IHT

Hi Niall, 

Firstly if you and your partner are joint owners, IHT is payable on death of first owner, by surviving owner, so on half of the value. I have learned as it is a question I too am interested in, differrent areas have differrent rates re IHT so you need to research each area you,re interrested in. Our house is in Valencia and I believe they have a 100k€ allowance but also read in the area very few surviving owners(spouses) pay much in IHT. I have also read a recent change in the law deemed it was discrimination to class non residents differrently to residents so it appears both will pay same amount. IHT will also be payable on 2nd owners death but on whole of value and is calculated by the relationship of the inheritor to the owner. Each inheritor has a differrent allowance . There is so much conflicting information on the subject that I am paying for a consultation in March with a tax consultant when I return to Spain on this and many other tax responsibilities we need to know for definite to allow us a decision regarding residency later this year or not.

Regards

Pauline.

Unfortunately I lost my wife in 2014 and went through the IHT process, we have an apt with app value of €95000.

Last year I responded to someone who had just lost her husband, I have copied/pasted my response to her to save me writing it all out again.

 Everyone's circumstances will be slightly different but it may give you an insight into how things panned out for me.

Pauline, you will notice my referral to the changes made to EU law, I was right in the middle of the changes.

Copy below.

I found myself in your position when my wife passed away in 2014.

We were non resident and jointly owned property in the UK and Spain, we had hand written mirror wills in the uk which were well out of date but we had an official Spanish will.

In the uk I spoke to the probate office who informed me that it isn't always necessary to through probate and in fact I did it all myself without any experience whatsoever.

Find out from the banks/building societies what their financial limits are for each account before probate becomes necessary, I shuffled money around my accounts to remain below their limits. This way only death certificates are needed to put the account into your name only, I also bought extra certs at the time of registering the death.

Also speak the land registry, I filled in their forms and sent them back along with a death certificate, you should inherit your husband's half of the uk property automatically as his spouse but the land registry need to know. The utility companies may need the death certs too.

As for Spain, I could not have done this without the help of my fantastic solicitor who walked me through the process, she was so patient as I had so many questions but she answered every single email promptly, I gave her power of attorney and only went over to Spain to sign paperwork at the end of the process, she also changed my Spanish bank account into my name only and yes they did freeze my wife's half, keep enough in there to cover your direct debits.

As you will be inheriting your husband's half of the property inheritance tax could be due and should be paid within 6 months. I took quotes from 5 different solicitors, their fees varied enormously, luckily I picked the right one.

In 2014 there was a law going through the EU courts regarding how Spain were unfairly taxing non residents at different rates to Spanish residents, this law was upheld at about the same time as I had just paid the inheritance tax but my solicitor claimed this back for me, it took 13 months for the refund to hit my account though, my solicitor said that I was the first person that she knew of to recover this tax.

Also around the same time allowance levels for inheritance tax within the Valencian community were raised to 100,000 euros, so you may get away with the tax depending upon the value of your property, not sure if these allowance levels are the same today.

This was the way the situation worked out for me, I am sure that others may have had different experiences but maybe a little of the above may help you.

End of copy.

In terms of costs and after reclaiming the already paid IHT this cost me app €2700 which covered the Notary, land registry, amendment to our Spanish will and maybe other bits which I can't recall lol and then the Solicitor's fee which would have been app €1000 but I have to say that my Solicitor was fantastic, I had taken 6 quotes in total and some were nearly €6000.

 HTH, Ken.

Ken,

Many sympathies for your loss, and many thanks for your detailed experience. That same year, I lost my mother and went through similar processes myself to deal with the probate. As there was a property, I too received many quotes for solicitors ranging from £200 to £600 and decided to do it myself. It wasnt even that difficult and everything was concluded in a month.

If I learned anything I learned legal fees are an unfortunate way of getting money from you at a difficult time.

I,m glad your Spanish property was not too difficult a time and you found a decent solicitor but even so that side still cost you a fair sum to undertake.

I naively thought on making a Spanish Will in 2006 it meant the inheritance tax was dealt with under Uk rules with Uk threshold as we were Uk residents. In 2011 we had to renew ours in Spain after the death of our daughter and the wonderful notary then explained fully the clause to invoke Uk laws in a Spanish will simply stopped the Spanish laws of succession, allowing us to dictate what happened with our Spanish property but Spanish IHT would still apply.

Our need to take further professional advice next month is to define the differrence in IHT with undertaking a will as a Spanish resident to staying as a non resident as we have 2 Uk properties that we dont intend selling. I have received such conflicting information. 

You havent said if you still have your Spanish apartment, if so I,m sure your late wife would want you to enjoy it. I would still visit ours by myself but my husband has said he definitely wouldn't.

Thankyou for sharing your experience.

Kind regards

Pauline.

Pauline

I am so sorry to hear about your Daughter, there is nothing in the world worse than losing a child and I am speaking from experience here.

You are doing the correct thing in obtaining the correct legal advice, this forum is fantastically helpful with some very knowledgeable members but even they would advise you to do what you are doing for safety's sake.

Yes I still have the apt, 18 yrs this year and get over to Spain as often as we can, I am in a new relationship and everything is great.

Hi Ken

So happy life is good for you. We are trying to get in depth information as we have had so many nightmares with our Spanish property which has put us back at least 10years and although everyone who knows our stories cant understand why we are not giving up our property let alone continue to consider making the original dream a reality. Brexit has been the final straw, we have never experienced the heat in the mid summer months after 13years of holidaying spring or autumn and now as hubby has finally retired at 75years, we find we still have to holiday either side of summer for 90days or 1 stay in mid summer of 90days for the year as we are so inland temps in winter after 5pm are much lower than here in Uk and the house is typically uninsulated.Cant stand cold on winter evenings even in Spain.

Our biggest obstacle for us is owning Uk cars. We have no relative to own and insure on our behalf yet would need one while we refurbish our Uk home of 40years prior to renting it out.

I fear after losing over 100,000€ on our dream home it will only ever be a dream for temporary visits. We cant afford to make a mistake so doing tons of research. We,re thankful, despite everything and now pensioners we can just afford to continue paying out for 2 homes year round or we,d be stuck.

Keep enjoying the sun!

Regards

Pauline.

Omg you lost over €100,000 that is devastating.

If it was me I think I would be splitting the 90 days up as July and August can be oppressively hot but maybe as you feel the cold so much you may fare better than I would.

Yes at 75 hubby needs to take a well earned retirement.

The cars one is awkward, maybe sell both to recover best cash and buy an older runaround with cheaper insurance.